A leaner business model ensured that Senior (SNR) reaped the full benefits of improving trading conditions across key aerospace and industrial vehicle markets. Revenues rose 7 per cent at constant currencies, paving the way for an impressive 21 per cent uptick in adjusted operating profit growth at the halfway stage.
The high-end components and systems manufacturer emerged as a major beneficiary of increased production of new, more efficient, large commercial aircraft programmes. Sales in the core aerospace division rose 5 per cent to £364m as the engineer’s two big customers, Airbus and Boeing, ramped up work on 737 MAX, A320neo, A350, and 787 planes. Encouragingly, unlike in 2017, an uptick in aerospace contracts failed to weigh on the bottom line: divisional adjusted operating margins widened by 90 basis points to 10.5 per cent.
Senior’s smaller Flexonics unit also prospered from a combination of cost management, efficiency initiatives and a healthier trading environment. Donald Trump’s infrastructure investment drive and corporate tax cuts triggered a welcome surge in demand for trucks in North America, while increased drilling activity in upstream oil and gas related markets spurred appetite for Senior’s flow controls and oilfield services. Prior to these results, Numis forecasted December year-end adjusted pre-tax profit of £82m and EPS of 15.3p, against £73.1m and 14.4p in 2017
| SENIOR (SNR) | ||||
| ORD PRICE: | 323p | MARKET VALUE: | £1.35bn | |
| TOUCH: | 323-324p | 12-MONTH HIGH: | 328p | LOW: 237p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 130p* | NET DEBT: | 27% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 510 | 24.0 | 4.73 | 2.05 |
| 2018 | 523 | 31.4 | 5.90 | 2.19 |
| % change | +3 | +31 | +25 | +7 |
| Ex-div: | 1 Nov | |||
| Payment: | 30 Nov | |||
| *Includes intangible assets of £341m, or 81p a share | ||||
