Senior confident after mixed first half

The FTSE 250 engineering solutions provider saw revenue increase 4% year-on-year to £504.1m in the six months ended 30 June, supported by strong trading performance and a growing order book with a book-to-bill ratio of 1.15.

Its adjusted operating profit rose 10% to £25.1m, leading to an adjusted operating margin improvement of 30 basis points to 5.0%.

However, operating profit declined 1% to £20.6m, and profit before tax fell 2% to £13.2m.

Adjusted profit before tax showed a 5% increase, reaching £18.4m.

Basic earnings per share dropped 6% to 2.63p, while adjusted earnings per share increased marginally by 1% to 3.55p.

Senior announced a 25% increase in its interim dividend, raising it to 0.75p per share, reflecting confidence in its future prospects.

Free cash flow saw a significant boost, rising by 125% to £3m, although net debt, excluding capitalised leases, increased by £24m to £156.1 million.

Return on capital employed (ROCE) improved by 100 basis points to 7.3%.

The company highlighted notable contract wins in its Aerospace and Flexonics divisions, contributing to the positive outlook for the full year, which remains unchanged with expectations of good growth.

“Senior has delivered a robust set of results that are in line with our expectations,” said group chief executive officer David Squires.

“Our Aerospace revenue and profits have grown strongly notwithstanding 737 MAX volumes being subdued as a consequence of the ongoing situation at Boeing.

“Our Flexonics Division continued to perform well, maintaining double digit margins, albeit revenues and profits were lower as land vehicle markets started to normalise and upstream oil & gas customers reduced inventory levels.”

Squires said for the full-year, the company still expected to maintain good performance in Flexonics, with the first half “slightly higher” than the second due to a return to more typical levels of land vehicle demand.

“The group's diversified position across key civil and defence aircraft platforms, strong order intake and increasing aircraft build rates are expected to drive good growth in Aerospace for the full-year.

“Higher volumes, operational efficiency benefits and improved pricing are expected to result in second-half performance being higher than the first half.

“Overall, the board's expectations of good growth for the group in 2024 are unchanged.”

At 0826 BST, shares in Senior were down 3.05% at 152.8p.

Reporting by Josh White for Sharecast.com.