Senior remains confident despite fall in sales
By Rob Griffin
09:41, 11 October 2021
UK engineering solutions provider Senior remains optimistic about its prospects – despite sales falling 14%, on a constant currency basis, in the first nine months of the year.
In a trading update, the technology components manufacturer said demand was recovering strongly in land vehicles and aviation, while defence markets were stable.
It also highlighted supply chain issues but insisted the board remained confident of making good progress as the recovery continues.
Management expectations
Trading has been in line with management expectations, according to the update, which covers the nine months to the end of September 2021.
Excluding Senior Aerospace Connecticut, which was divested on 22 April 2021, revenue for the nine-month period on an organic, constant currency basis went down by 11%. “This reflected the reduction in civil aircraft production rates, partly offset by growth from defence, semi-conductor equipment and space markets,” it stated.
The announcement resulted in the company’s share price slipping 0.5% to 167p during early trading in London.
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Sales growth in Flexonics
Flexonics saw sales grow 11%, on a constant currency basis, compared with the equivalent period last year, according to the statement.
“As anticipated, growth from the recovery in heavy-duty truck and off-highway markets was partially offset by a decline in oil & gas and the closure of the Senior Flexonics business in Malaysia,” it stated.
Meanwhile, group revenue for the period was £496m – 7% lower, on a constant currency basis, than the equivalent period in the previous year, “part of which was pre-Covid and also included Senior Aerospace Connecticut for the full nine months”.
It added: “Excluding Senior Aerospace Connecticut, revenue for the nine-month period on an organic, constant currency basis, declined by 4%.”
Outlook
According to Senior, market demand is recovering strongly in both land vehicles and domestic aviation, and defence markets remain stable.
“This positive recovery in demand has contributed to the well-publicised supply chain constraints that both our customers and Senior are having to weather,” it said.
It also insisted its operating businesses were “managing these increasing headwinds diligently”. The group’s outlook remains in line with management’s previous expectations.
“Looking further ahead, our differentiated offering in fluid conveyance and thermal management products in attractive and diverse end markets means that the board is confident we will make good progress as the recovery continues,” it added.
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