A weak European car market, along with a profit warning from engine maker Cummins – a customer of Senior – have made unwanted headlines. Still, the sharp derating since April looks overdone given unchanged full-year profit forecasts and the stellar growth on offer at its aerospace division.
Aerospace now accounts for almost two-thirds of the business after sales there grew 28 per cent in the period, at constant currencies, to £242.5m and adjusted operating profit rose 22 per cent to £36.5m. Including the Weston acquisition, sales to large commercial aircraft programmes like the Boeing 787 soared 59 per cent and now comprise half of divisional sales. Helping Boeing and Airbus clear an eight-year backlog will keep Senior busy, and a trend towards outsourcing should see Rolls-Royce put more work its way, too. Even defence – making bits for the Blackhawk helicopter and C-130J transport aircraft – grew sales 7 per cent. Elsewhere, big volumes and efficiency gains in the North American heavy truck market were enough to offset weaker demand from European carmakers Renault, Peugeot and Ford – driving profit at the Flexonics land vehicle unit up 12 per cent on revenue that was 9 per cent higher.
Broker Investec Securities expects full-year adjusted pre-tax profit of £89.1m, giving adjusted EPS of 16.1p (2011: £78m/14.1p).
SENIOR (SNR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 179p | MARKET VALUE: | £725.1m | |
| TOUCH: | 179-180p | 12-MONTH HIGH: | 215p | Low: 128p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 70p* | NET DEBT: | 26% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 316 | 35.6 | 6.65 | 1.15 |
| 2012 | 377 | 43.2 | 8.17 | 1.38 |
| % change | +19 | +21 | +23 | +20 |
Ex-div: 8 Aug Payment: 7 Sep *Includes intangible assets of £17.5m, or 54p per share | ||||
