Senior profit slides as Flexonics continues to struggle

Manufacturing and engineering group Senior traded in line with expectations in its first half, it said on Monday, with revenue rising 3% on a constant currency basis to £510m.

The FTSE 250 firm saw operating profit slide 32% at constant currencies to £28.9m in the six months to 20 June, while adjusted operating profit was off 29% on the same basis to £37.5m.

Its adjusted operating margin fell 3.2 percentage points at constant exchange rates to 7.4%.

Senior said its profit before tax was down 35% to £24m, and its adjusted profit before tax was 31% softer at £32.6m, both at constant currencies.

Basic earnings per share were down 25% at 4.73p, and adjusted earnings per share were off 23% at 6.23p.

The company’s board declared an interim dividend per share of 2.05p, an improvement of 5% on the same time last year.

During the half, its free cash flow was £29.6m - growth of 71% year-on-year - and its net debt fell £26m year-on-year, or £27m through the six months, to £181.6m.

“Trading across the group in the first half of 2017 has been in line with expectations and the group delivered a healthy cash performance,” said group chief executive David Squires.

“Overall, the board's expectation for 2017 remains unchanged at current exchange rates.”

In aerospace, Squires said the company anticipated an “improved performance” in the second half of the year, as previously guided, driven by increasing revenues and operational improvements as Senior continued its cost reduction focus, particularly on newer programmes.

“In Flexonics we are seeing some signs of recovery in our end markets and continue to believe that the end of 2017 will be an inflexion point for our truck and off-highway and upstream oil and gas facing businesses.”

As the board had previously indicated, Squires said the company continued to believe that Flexonics performance would be marginally lower in 2017 compared to 2016.

The company claimed it remained on track to deliver £4m in annualised streamlining savings from 2018, with the group “well-positioned” to increase market share and deliver “good growth” over the medium term.

“Looking further ahead we remain positive about future prospects with strong and visible growth in aerospace and the anticipated recovery in Flexonics.”