UPDATE: Senior To Beat 2010 Views As Aircraft Orders Build
02 August 2010 - 2:52PM
Dow Jones News
U.K. aerospace engineer Senior PLC (SNR.LN) Monday said it
expects 2010 profit to beat market forecasts now production rates
for major new aircraft like Boeing Co.'s (BA) 787 Dreamliner are
beginning to take off.
Boeing and European rival Airbus took 233 orders for new
aircraft, net of cancellations, at this year's Farnborough Air Show
in England, adding to 268 orders already received in the first half
of 2010.
Mark Rollins, Group Chief Executive of Rickmansworth,
England-based Senior, told Dow Jones Newswires the market for new
planes is picking up as airlines reinvest in their fleets. Senior
makes parts for the nacelles, body and Rolls-Royce Group PLC
(RR.LN) engines on the Dreamliner, as well as components for
military aircraft like United Technologies Corp.'s (UTX) Sikorsky
Black Hawk helicopter, which are also in demand.
Senior said increasing revenue at its aerospace unit during the
second half will offset weaker trading at its Flexonics business,
which primarily makes parts for cars and trucks.
The company, which raised its dividend 11% to 1 pence a share,
said it expects 2010 pretax profit, excluding certain items, to be
ahead of consensus forecasts of GBP55.6 million.
Brokerage Investec said it expects to raise its 2010 earnings
forecasts for Senior by between 10% and 15%, while analysts at
brokerage Brewin Dolphin said they expect to raise theirs by
10%.
"The commercial aircraft market is as strong as it has been for
some years and gives increasing confidence in the medium-term
outlook," said Brewin Dolphin.
At 1418 GMT, shares in Senior were 5.1 pence or 4% higher at
132.6 pence, outperforming a 0.6% higher Dow Jones U.K. Smaller
Companies index.
Senior Monday reported a 43% rise in pretax profit to GBP30.2
million for the six months to June 30, compared with a profit of
GBP21.1 million a year earlier.
Revenue increased 4.3% to GBP287.7 million, driven by higher
income in aerospace and a sharp rebound in demand for cars and
trucks. Rollins said sales of cars and trucks were aided by
government incentive programs and Senior expects trading at its
Flexonics unit to get tougher during the second half.
Net debt decreased by 15% during the first six months of the
year to stand at GBP87.4 million at June 30 and Rollins said this
provides the company with extra firepower to make acquisitions if
needed. Senior is scouting for businesses to buy but no deal is
imminent just now, said Rollins.
-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272;
jason.douglas@dowjones.com
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