Senior trading in line with expectations, sees aerospace pick up in second half

The FTSE 250 company expected the first half to be affected by the transition from more mature aerospace programmes to new airframe and engine products.

Senior said the improved profit from the aerospace divisions would be due to increasing revenues and operational improvements following a focus on cost reduction.

It added that there had been an increase in work on large commercial aircraft activity, the group's most important market in the aerospace division, since January which offset the expected fall in regional, business jets and military activity.

Production volumes on the new programmes such as the Airbus A320neo and A350 were ramped up, while volumes on mature programmes such as A320ceo, A380 and 777 reduced as expected.

The flexonics division benefited from strong industrial aftermarket demand, however the company said that underlying market conditions in truck and industrial markets remained challenging, as North American Class 8 truck production declined 20% in the quarter, compared to last year.

Senior believes that late 2017 will be “inflexion point” for the flexonics divisions as truck and off-highway markets recover in 2018 and investment in industrial projects increases.

It anticipates that the flexonics division's performance will be marginally lower this year than 2016.

In the first quarter, net debt increased as expected to £219.7m, due to the normal seasonal increase in working capital and continued planned investment in capital expenditure to support organic growth.

Looking ahead, Senior expects to make progress from 2018 onwards as new aerospace and flexonics programmes and products enter production and when it expects to realise the benefits from operational improvements and cost saving measures.

Shares in Senior rose 2.22% to 212p at 0809 BST.