Senior shares jump 7% on mixed final results

Senior shares jump 7% on mixed final results

Senior plc (LON:SNR) have seen their shares spike following a mixed set of final results.

Shares in Senior trade at 152p (+7.65%). 2/3/20 10:12BST.

The engineering and defense first said that its’ results had been pleasing, despite the recent problems that Boeing (NYSE:BA) had been facing.

The Chief Executive noted: “Senior has delivered robust full year results for 2019 with adjusted earnings per share growth and a strong free cash flow performance.  This result has been delivered in a period where the business has faced challenges caused by the grounding of the Boeing 737 MAX fleet.

The civil aerospace market has been impacted by the grounding of the Boeing 737 MAX fleet following the Lion Air and Ethiopian Airlines tragic air accidents.  As a consequence, in mid-April 2019 Boeing reduced the programme build rate from 52 airplanes per month to 42 per month.  In December 2019, Boeing announced the temporary suspension of 737 MAX production beginning in January 2020, pending the certification and return to service of the airplane.”

Despite the strong final results, Senior did allude to drops in revenue across 2020, however shareholders have reacted optimistically to the update provided today.

The firm reported that revenue had jumped 3% across 2019 to £1.11 billion, but without currency movements the figure saw a decline.

Looking at profit figures, Senior saw their pretax profits fall by 53% on an actual basis, tp £28.7 million.

The FTSE 250 listed firm added that they had been bruised by a £22 million loss in disposal following the sale of its Flexonics operations in France in 2019.

The aerospace division, saw their revenues increase by almost 6% to £835.4 million, however adjusted operating profit in the division dropped 8.7% to £76.4 million.

Going forward, the firm did not give such an optimistic sentiment for 2020. Senior expect Aerospace revenue to drop by around 20%, as performance will be more second half weighted.

Senior have proposed a final dividend of 5.23p per shares, giving a 2019 total of 7.51p.

Commenting on the results, David Squires, Chief Executive of Senior plc, said:

“Senior delivered robust full year results for 2019 with adjusted earnings per share growth and a strong free cash flow performance.  This result has been achieved in a period where the business has faced challenges caused by the grounding of the Boeing 737 MAX fleet.  It is clear that our performance in 2020 will continue to be affected by the 737 MAX situation and the Company is taking all necessary actions to mitigate the impact.

We are closely monitoring the development of the coronavirus (COVID-19), including the potential impact of any macroeconomic disruption on our end markets, our supply chain and those of our customers.

However, we entered 2020 with a robust balance sheet and a continued focus on cost, efficiency and cash generation.  We are taking firm actions to restructure the business and have every confidence in returning to growth in 2021.”

Senior review their Aerostructures division

In December, the firm gave an update saying that they would be performing an internal review.

Senior confirmed that it has been reviewing all strategic options for its Aerostructures business, which includes an early stage assessment of a potential divestment of the division,” the FTSE 250  listed company said.

The Hertfordshire-based company added that the Aerostructures review is in line with Senior’s policy to review its portfolio and evaluate all its operating businesses in terms of their strategic fit within the group.

The Aerospace unit supplies components for airplanes such as Boeing accounts for 70% off overall revenues, and the aerospace business includes divisional sections such as fluid conveyance and engines.