Senior raises full-year expectations as end markets continue to recover

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Bid target Senior PLC (LON:SNR) said trading in the first half of 2021 was ahead of management expectations.


The high technology components manufacturer, which has been hit hard by the pandemic, said sales in its aerospace division are expected to be modestly ahead of expectations, albeit 21% lower (on a constant currency basis) than in the first half of 2020.


The Flexonics business unit’s first-half sales are expected to be in line with expectations, up 6% year-on-year in constant currency (CC) terms.


Growth from the recovery in heavy-duty truck and off-highway markets was partially offset by a decline in oil & gas markets and the closure of the Senior Flexonics business in Malaysia, Senior revealed in a post-close period trading update.


For the group as a whole, sales are likely to be down 13% in CC terms on the first half of last year.


Management reiterated its end markets are showing clear signs of recovery, a view expressed when it saw off repeated bid approaches from private equity group Lone Star.


READ Senior shares shrug higher on fifth bid from US private equity group


“Looking further ahead, our differentiated offering in fluid conveyance and thermal management products; our investment in low carbon and advanced manufacturing technology; our global footprint; our strong track record and commitment to the highest ESG [environmental, social and governance] standards; and our positioning in attractive and diverse end markets, means that the board is confident we will make good progress as the recovery continues,” Senior said.


The first half of the year saw a net cash inflow of GBP61mln as a result of which net debt at the end of June is expected to be around GBP71mln, excluding capitalised leases of GBP76mln. Headroom on Senior’s committed borrowing facilities has increased by GBP58mln since the end of 2020 to GBP215mln.


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