Senior's (SNR) aerospace operating margins were hampered by Boeing’s decision to lower its production of its stricken 737 Max jet, which is currently grounded after two crashes that killed 346 people. The engineering group also flagged uncertainty surrounding the Boeing 777x jet, which has been delayed by engine problems.
In April, Boeing reduced its monthly production of Max planes from 52 to 42, having previously anticipated ramping up to 57 jets. The decision prompted Senior, which makes airframe and engine components for the Max, to warn of the resulting risk to margins that month. At its half-year results, aerospace adjusted operating margins fell 150 basis points from last year to 9 per cent.
At its July second-quarter results, Boeing maintained its late 2020 target for its first delivery of the 777X, but flagged “significant risk to this schedule given engine challenges”, which are delaying the jet’s first flight until early 2020. Senior makes a host of components for the Boeing 777 and the 777x, and chief executive David Squires said that the delay would likely leave the group “making the existing 777 parts for a bit longer, before we switch across to the 777x”.
Bloomberg consensus forecasts predict full-year 2019 earnings per share of 15.4p, rising to 16.9p in 2020.
| SENIOR (SNR) | ||||
| ORD PRICE: | 197p | MARKET VALUE: | £826.2m | |
| TOUCH: | 196-197 | 12-MONTH HIGH: | 330p | LOW: 184p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 133p* | NET DEBT: | 31%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 523 | 31.4 | 5.90 | 2.19 |
| 2019 | 580 | 26.5 | 4.81 | 2.28 |
| % change | +11 | -16 | -18 | +4 |
| Ex-div: | 31 Oct | |||
| Payment: | 29 Nov | |||
| *Includes intangible assets of £334m, or 80p a share **Net debt does not include lease liabilities of £96.3m | ||||
