Key Points:
- Senior plc reports nearly doubled profits for 2023, attributing the success to increased civil aircraft production rates and vehicle markets.
- CEO David Squires anticipates higher sales in 2024, citing a diversified position across key civil and defense aircraft platforms.
- Adjusted pre-tax profit for the year ending December 31, 2023, surges by 91% to £38.3 million ($48.5 million).
- Senior proposes a 77% increase in annual dividends, reflecting confidence in sustained value generation for shareholders.
British aerospace manufacturing and engineering company Senior plc (LSE:SNR) reported robust financial results for 2023, nearly doubling its profits, driven by heightened civil aircraft production rates and strong demand in the land vehicle markets. The positive performance has led the company to raise its dividend, signaling confidence in its future outlook.
CEO David Squires highlighted the company’s diversified position across key civil and defense aircraft platforms, emphasizing the benefits of rising aircraft production rates. The anticipated higher sales in 2024 and beyond will contribute to sustained growth. Senior’s forecast for 2024 performance aligns with estimates, with particular optimism surrounding its collaboration with Boeing.
As one of its top customers, Boeing requests suppliers to maintain production levels of 737 MAX plane parts at previously agreed-upon rates, which bodes well for Senior’s prospects. The Federal Aviation Administration’s 90-day restriction on Boeing’s production rate increase provides a buffer, allowing Senior to benefit even if production remains at the current 38 planes a month.
In an interview with Reuters, CEO David Squires discussed the growth potential, noting that even if Boeing doesn’t surpass the 38-plane-per-month rate, there is still room for expansion compared to last year’s 31 planes per-month manufacturing rate.
The company’s financial performance for the year ending December 31, 2023, reflected a significant upswing, with an adjusted pre-tax profit surging by 91% to reach £38.3 million ($48.5 million). In response to the positive results, Senior proposed an annual dividend of 2.3 pence, marking a substantial 77% increase, reflecting confidence in sustained value generation for shareholders.
A key factor contributing to Senior’s success is the performance of its Flexonics division. Specializing in manufacturing fluid conveyance and thermal management components for vehicles and energy applications, Flexonics experienced a normalization of demand to more typical levels. This division’s resilience and adaptability to market dynamics have contributed significantly to Senior’s overall positive financial performance.
CEO David Squires expressed minimal concern regarding potential disruptions to shipping via the Red Sea, stating that much of Senior’s product sourcing occurs in North America or Europe. This geographical diversification minimizes the impact of shipping disruptions on the company’s operations.
