Senior H1 profit rises 32% on Aerospace growth, margin gains

Investing.com -- Senior plc on Monday reported a 32% year-over-year increase in pre-tax profit for the first half of fiscal 2025, supported by higher revenue and operating margins in both its Aerospace and Flexonics divisions.

The company maintained its full-year forecast and said the planned sale of its Aerostructures unit remains on schedule.

Group sales from continuing operations rose to £371.2 million, up 5% in constant currency terms and 3% on a reported basis compared to the same period last year. 

EBITA increased to £31.2 million, a 14% gain in constant currency and 10% in reported terms, lifting the EBITA margin by 60 basis points to 8.4%. 

Pre-tax profit came in at £22.8 million, up from £17.8 million a year earlier. Earnings per share increased 8% to 5.1p. Free cash flow rose 43% year over year.

The Aerospace division posted £209 million in revenue, up 7% in constant currency. Civil aerospace revenue increased 2%, including a 66% rise from Spencer Aerospace. 

Defense sales grew 14% due to higher demand for original equipment and aftermarket parts, while sales to adjacent markets increased 17% due to activity in the semiconductor sector. 

EBITA for the division rose to £21.6 million, a 13% year-over-year increase in constant currency. EBITA margin improved to 10.3%, up 50 basis points. 

The book-to-bill ratio for the unit was 1.05x, supported by a new three-year high-pressure hydraulics contract secured by Spencer Aerospace.

Flexonics reported £163 million in revenue, up 2% in constant currency and flat on a reported basis. Land vehicle sales increased 5% year over year, including a 41% rise in passenger vehicle sales. European truck sales increased slightly, while U.S. truck sales declined 13%. 

Power and Energy revenue declined 2% as downstream demand remained steady but upstream oil and gas and industrial sales fell. EBITA rose to £18.4 million, up 6% in constant currency, with margins increasing to 11.3%, a 40 basis-point improvement.

The company reported net debt of £162.4 million on a pre-IFRS16 basis, a 6% increase from a year ago. 

The net debt-to-EBITDA ratio was 1.9x, within the company’s guidance range of around 2.0x. Free cash flow rose to £10.2 million from £5.4 million in the first half of fiscal 2024.

Senior said full-year expectations for 2025 remain unchanged at the group and divisional levels. 

Management said it expects a balanced EBITA performance across both halves of the year in the Aerospace division, although growth in semiconductor and defense segments may be lower in the second half compared to the first. 

Guidance for the Flexonics division also remains unchanged, with EBITA performance expected to be broadly in line with the prior year.

The company gave no major update on its proposed sale of the Aerostructures business, which was announced two weeks prior, but reiterated that the transaction is expected to be completed in late 2025. 

The unit recorded £148 million in sales in the first half, up 6% year over year. EBITA rose to £0.5 million, slightly ahead of earlier guidance. Full-year EBITA guidance for Aerostructures remains at £9 million to £11 million.

Consensus forecasts continue to reflect contributions from the Aerostructures unit, though Jefferies said limited changes are expected to EBITA or pre-tax profit estimates after the disposal.

“FY25F guidance is unchanged and consensus forecast look well-positioned (incl.& excl. Aerostructures) which is helpful, and we remain positive on the group’s evolution, the opportunity to deliver a higher quality and more valuable business over the next few years,” Jefferies added. 

Senior declared an interim dividend of 0.85p per share, a 13% increase from 0.75p in the year-earlier period.