Aerospace and industrial equipment manufacturer Senior (SNR) had already warned that the grounding of Boeing’s 737 Max jet would hit earnings in 2019. The group makes components for companies in the Max’s supply chain and Boeing cut its monthly build rate from 52 planes to 42 in April. Senior’s adjusted operating profit dropped 6 per cent at constant currencies to £89m, with a 0.5 percentage point contraction in the margin to 8 per cent.
Despite the Max woes, aerospace revenue still grew 6 per cent to £835m, with stronger sales to other civil and military programmes. The market for narrow-body aircraft remains strong and US defence spending is underpinning demand for aircraft such as the F-35. But with Boeing suspending all Max production from January, Senior is guiding aerospace revenue will come in a fifth lower in 2020.
Over in ‘flexonics’ – which make products for vehicle emissions and thermal management – revenue dropped 16 per cent amid softer truck and off-highway markets. Margins were bolstered by cost-cutting in 2019, but are expected to be squeezed in 2020 as cyclical end market weakness persists.
As part of its ‘prune to grow’ strategy the group sold three non-core businesses, but the £22m loss on these disposals was behind the big drop in statutory pre-tax profits.
Berenberg forecasts adjusted operating profit will fall to £30m and EPS to 7.94p in 2020, rising to £55m and 10.3p in 2021.
| SENIOR (SNR) | |||||
| ORD PRICE: | 147p | MARKET VALUE: | £607m | ||
| TOUCH: | 146-147p | 12-MONTH HIGH: | 237p | LOW: | 136p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 21 | ||
| NET ASSET VALUE: | 135p* | NET DEBT: | 41%** | ||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
| 2015 | 0.85 | 63.8 | 11.6 | 6.20 | |
| 2016 | 0.92 | 55.5 | 10.8 | 6.57 | |
| 2017 | 1.02 | 52.2 | 14.4 | 6.95 | |
| 2018*** | 1.08 | 61.3 | 12.8 | 7.42 | |
| 2019 | 1.11 | 28.7 | 7.0 | 7.51 | |
| % change | +3 | -53 | -45 | +1 | |
| Ex Div: | 30 Apr | ||||
| Payment: | 29 May | ||||
| *Includes intangible assets of £310m, or 74.9p a share | |||||
| **Includes lease liabilities of £83.7m | |||||
| ***Restated | |||||
