Senior (SNR) H1 2024 earnings summary

Executive summary

• Group revenue grew 7% year-over-year on a constant currency basis to £501.4m, with adjusted operating profit up 13% to £25.1m, driven by strong Aerospace growth and resilient Flexonics margins.

• Book-to-bill ratio at 1.15, supported by notable contract wins and renewals in both divisions.

• Interim dividend increased by 25% to 0.75p per share, reflecting confidence in performance and outlook.

• Strategic review of Aerostructures business ongoing, including potential divestment.

• Full-year outlook remains positive, with H2 Aerospace performance expected to exceed H1.

Financial highlights

• Revenue for H1 2024 was £501.4m (+7% constant currency, +4% reported); adjusted operating profit £25.1m (+13% constant currency, +10% reported); adjusted operating margin improved 30bps to 5.0%.

• Adjusted profit before tax up 8% to £18.4m; adjusted EPS up 1% to 3.55p.

• Free cash flow improved to £3.0m from a negative £11.8m in H1 2023; net debt (excluding leases) at £156.1m, up from £132.0m at year-end 2023.

• ROCE increased by 100bps to 7.3% year-over-year.

• Book-to-bill ratio at 1.15, indicating strong order intake.

Outlook and guidance

• Board expects good growth for 2024, unchanged from prior guidance; H2 Aerospace performance expected to exceed H1.

• Flexonics H1 performance expected to be slightly higher than H2 due to normalizing land vehicle demand and upstream oil & gas inventory rebalancing.

• Group expects to largely offset lower 737 MAX production with growth in other areas.

• Working capital expected at 17-18% of sales for the year to support growth.

• 10 cent movement in $:£ exchange rate estimated to impact full-year revenue by £45m, adjusted operating profit by £3m, and net debt by £11m.