Senior warns over 2016 performance

Senior warned on Thursday that its performance for the full year 2016 is likely to be lower than previously expected amid challenging market conditions in truck and off-highway and oil and gas markets.

In a trading update for the nine months to the end of September, the company said adjusted pre-tax profit fell 18% to £58.5m. Revenue increased by 7% to £682.2m, which included a favourable exchange rate impact of £48m and a beneficial incremental impact from acquisitions of £26.1m.

On an underlying organic basis, revenue from operations was down 4% at constant currency as growth from the aerospace division was offset by lower revenue in Flexonics due to weaker truck and off-highway, and oil and gas markets.

In the aerospace division, activity in the large commercial aircraft and regional jet markets increased, but as the group progressed through the third quarter, the increase was slower than previously anticipated and activity in the business jet market continued to decline.

Bid activity for new business remained high and important wins were made in the third quarter for the group’s Structures business. However, the performance of the aerospace division in the third quarter was below expectations due to slower than anticipated ramp-up of new production programmes.

The unit was also hit by supplier issues which have impacted some of Senior’s US and UK operations. The company said the issues are being addressed and are largely expected to be resolved by the end of the year.

The aerospace business was also affected by programme-specific price increase discussions not yet concluding and discussions are continuing with customers to bring these to resolution.

Activity in the Flexonics division continued to reflect the challenging market conditions in truck and off-highway and oil and gas markets. In particular, activity and the outlook for North American heavy truck production deteriorated in the third quarter, denting the division’s performance.

“Looking further ahead, the group remains well positioned for the future with Aerospace production programmes continuing to ramp-up and many new business opportunities in discussion with key customers.

“In Flexonics, despite the challenging conditions, we have continued to secure positions on new programmes and platforms, and therefore are well positioned to resume growth when markets recover.”