Senior earnings fall as board looks for further savings

Senior posted its results for the 2016 calendar year on Monday, with revenue rising 8% to £917m, although at constant currencies the change was a 2% decrease.

The FTSE 250 company’s operating profit was £65.8m for the 12 months, a 9% decrease, or 21% at constant currencies, while adjusted operating profit was down 21% at £85.6m, or down 28% at constant exchange rates.

Profit before tax reduced 13% to £55.5m, and adjusted profit before tax fell 24% to £75.3m, but those two falls were 25% and 31% respectively at constant currencies.

Senior’s basic earnings per share fell 6% to 10.84p, while adjusted earnings per share were off 24% at 14.37p.

Total dividends paid and proposed still rose 6% to 6.57p, the board declared.

Free cash flow during the year was off 6% to £48.5m, while net debt increased £3.5m to £198.1m during the period.

“2016 was a challenging year with revenue growth in Aerospace offset by market-led reductions in Flexonics,” said chief executive David Squires.

“Despite these challenges Senior delivered strong free cash flow of £48.5m.

“In response to end market conditions and business opportunities in both divisions, we are streamlining parts of the group and have implemented a further cost savings programme.”

In Aerospace, Squires said the board expected further revenue growth in 2017 however, after allowing for costs of streamlining actions, it now expects overall performance to be broadly in line with 2016.

In Flexonics, whilst management anticipated that late 2017 should be an inflexion point as truck and off-highway markets recover in 2018 and investment in industrial projects increase, current trends suggested performance to be marginally lower in 2017 compared to 2016.

“Looking further ahead, Senior expects to make progress from 2018 onwards as new programmes and products enter production and margins recover as the benefits of the operational improvement initiatives and cost saving actions are delivered.”