First half margins down across the board at Senior

High-tech components manufacturer Senior issued a pre-close trading update on Tuesday, in which it reiterated that margins in the aerospace division will be lower in the first half of 2016.

The FTSE 250 firm said activity in aerospace is anticipated to increase during the period in line with expectations, but margins will be lower as the ramp-up of new production programmes continues.

In the company’s flexonics division, second quarter activity was continuing to reflect the challenging market conditions in truck and off-highway, and oil and gas markets, the board reported.

“While the division is continuing to focus on cost management and efficiency initiatives, the reduction in volumes and change in mix compared to 2015 means that H1 margins are likely to be lower than expected, in the range of 8%-9%,” it said in a statement.

Looking ahead, Senior’s board said revenue in the aerospace division is expected to grow in 2016 as a whole with a stronger profit in the second half, driven by increasing revenues and operational improvements, as set out in an update on 21 April.

“In the flexonics division, following the most recent market and customer data for the heavy truck and oil and gas sectors, it is anticipated that revenues in the second half of 2016 will be lower than the first half,” the board warned.

“We continue to focus on cost initiatives and these are anticipated to provide some improvement in flexonics profits in the second half.”

Senior said it will announce its results for the six months to 30 June on 1 August.