UK's Senior expects to hit medium-term targets ahead of schedule
Senior's Performance and Outlook
Aug 3 (Reuters) - British engineering firm Senior on Monday said it expects to achieve its medium-term targets ahead of schedule, citing resilient demand across its aerospace and fluid systems businesses.
Key Details and Financial Highlights
Here are some details:
Takeover and Margin Targets
• Senior, which is set to be taken over by a consortium comprising Tinicum and Blackstone in a £1.4 billion ($1.88 billion) deal, is targeting at least double-digit adjusted operating margins in the medium term.
Timeline for Targets
• CEO David Squires told Reuters that most analysts assumed that the targets would be achieved by 2028 or 2029, but the timeline had now moved forward, without specifying the exact timeline.
Profit Growth and Forecasts
• Senior reported a 38% growth in adjusted profit before tax at £34.8 million for the half year ended June 30 and maintained its annual forecasts.
Business Segments and Market Demand
Aerospace and Fluid Systems
• The company, which counts original equipment manufacturers like Boeing and Airbus as its customers, has reported steady demand for aerospace parts.
Flexonics Unit Performance
• Flexonics, a unit which makes cooling systems, fuel‑mixing and distribution equipment, also performed ahead of the company's initial expectations.
Full-Year Performance Confidence
• Senior said it was confident of delivering full-year performance in line with expectations upgraded in July.
Growth Drivers and Regional Impact
Civil Aerospace and Defence
• While civil aerospace was the main growth driver, the company's defence business, which focuses on military aerospace programmes, has also reported growth due to increased government spending, Squires said.
U.S. and European Markets
• Growth was driven mainly by the U.S., but increased spending in Europe would help Senior because it was on programmes like Eurofighter and Rafale from France, the CEO said.
Potential Impact of UK Defence Spending
• Commenting on whether the company expects a boost from new British Prime Minister Andy Burnham's plan to increase the UK's defence spending, Squires said it would depend on where the money was spent.
Takeover Timeline and Additional Information
Completion of Takeover
• The company said its takeover is expected to be completed by the end of 2026.
Exchange Rate
($1 = 0.7428 pounds)
Reporting Credits
(Reporting by Simone Lobo in Bengaluru; Editing by Sonia Cheema and Mrigank Dhaniwala)