Results for the year ended 31 December 2024
Trading in line with revised
expectations, strong cash performance
|
FINANCIAL HIGHLIGHTS
|
Year ended 31
December
|
change
|
change
|
(4)
|
|
|
|
2024
|
|
2023
|
|
(constant
currency)
|
|
|
REVENUE
|
£977.1m
|
|
£963.5m
|
+1%
|
+4%
|
|
|
OPERATING PROFIT
|
£40.3m
|
|
£37.9m
|
+6%
|
+10%
|
|
|
ADJUSTED OPERATING PROFIT (1)
|
£46.5m
|
|
£45.8m
|
+2%
|
+5%
|
|
|
ADJUSTED OPERATING MARGIN (1)
|
4.8%
|
|
4.8%
|
nil bps
|
+10
bps
|
|
|
PROFIT BEFORE TAX
|
£27.8m
|
|
£22.8m
|
+22%
|
+27%
|
|
|
ADJUSTED PROFIT BEFORE TAX (1)
|
£33.0m
|
|
£38.3m
|
-14%
|
-11%
|
|
|
BASIC EARNINGS PER SHARE
|
6.25p
|
|
7.52p
|
-17%
|
|
|
|
ADJUSTED EARNINGS PER SHARE (1)
|
7.17p
|
|
10.28p
|
-30%
|
|
|
|
TOTAL DIVIDEND (PAID AND PROPOSED) PER
SHARE
|
2.40p
|
|
2.30p
|
+4%
|
|
|
|
FREE CASH FLOW (2)
|
£17.3m
|
|
£15.5m
|
+12%
|
|
|
|
NET DEBT EXCLUDING CAPITALISED LEASES
(2)
|
£153.4m
|
|
£132.0m
|
£21m
increase
|
|
|
|
ROCE (3)
|
6.8%
|
|
7.1%
|
-30bps
|
|
|
Highlights
|
●
|
Group sales up 4%(4)
and adjusted operating profit up 5%(4)
yoy
|
|
●
|
Group free cash flow of £17.3m, up
12%
|
|
●
|
Book-to-bill 1.12 underpinning
confidence in future growth
|
|
●
|
Notable contract wins in both
Aerospace and Flexonics divisions
|
|
●
|
Spencer sales have grown over 135%
in the two years since acquisition
|
|
●
|
Sale process of Aerostructures at
an advanced stage
|
|
●
|
The Board anticipates good growth
for the Group in 2025 in line with its expectations
|
|
●
|
Final dividend of 1.65p, bringing
full year dividend to 2.40p, up 4%, reflecting trading performance
and future prospects
|
Commenting on the results, David Squires, Group Chief
Executive Officer of Senior plc, said:
"We are committed to a sale of our Aerostructures business and
are making good progress. There is good buyer interest, we
are now at an advanced stage of a sale process with a small number
of parties, and negotiations are progressing positively. We
are focused on completing the sale process and maximising value for
shareholders and will update the market in due course. This
is in line with our strategy to position Senior as the leading pure
play fluid conveyance and thermal management
business.
For 2024, Senior delivered results in line with revised
expectations, enhanced by a strong cash
performance.
Our Aerospace revenue and profits have grown,
notwithstanding
the well-documented situation at Boeing, which affected production
volumes. We responded dynamically, supporting our customers
and controlling our costs, to limit the impact on Aerospace
profitability in 2024.
In Flexonics, we continued to outperform land vehicle markets
and delivered double-digit margins, albeit revenues and profits
were slightly lower than 2024 as anticipated.
For the year ahead, the Board anticipates good growth for the
Group, in line with its expectations.
Increasing aircraft build rates, operational efficiency
benefits and improved contract pricing are expected to drive good
growth in Aerospace in 2025, with H2 performance expected to be
higher than H1.
For the full year, Aerostructures is expected to improve from
a loss making position in 2024 to an operating profit range of £9m
to £11m in 2025, with the large majority of that being earned in
H2.
We expect Flexonics performance in 2025 to be broadly similar
to 2024. In land vehicles, the ramp
up of programmes recently won means we expect our 2025 performance
to be broadly similar to 2024, despite some softness in North
America and Germany. In power and energy, activity levels are
expected to be similar to 2024.
Looking ahead, our strategy of positioning Senior as a pure
play fluid conveyance and thermal management business in attractive
and structurally resilient core markets; active portfolio
management; combined with our highly relevant technical
capabilities; and sector-leading sustainability credentials,
provides confidence of continuing performance improvements for the
Group. We have today announced new and improved medium term
financial targets which will deliver strong value creation for all
of our stakeholders.(5)
Reflecting the Group's performance and the Board's confidence
in its future prospects, the Board has approved a final dividend of
1.65 pence per share, bringing full year dividend to 2.40 pence per
share, an increase of 4% compared to 2024."
Further information
|
Bindi Foyle, Group Finance
Director, Senior plc
|
+44 (0)
1923 714 725
|
|
Gulshen Patel, Director of Investor
Relations and Corporate Communication, Senior plc
|
+44 (0)
1923 714 722
|
|
Richard
Webster-Smith, FGS Global
|
+44 (0)
7796 708 551
|
Webcast
For the Full Year Results 2024,
there will be a presentation on Monday 3 March 2024 at 9.00am
GMT.
Investor Event
Following the Full Year Results
presentation, Senior will be holding an Investor Event from 10.00
am to 11.45 am GMT. This will focus on delivery of strategy,
the prospects for Senior as a pure play fluid conveyance and
thermal management ("FCTM") business, and will outline new and
improved medium term financial targets for the FCTM business.
Both events will be accessible via a live webcast on Senior's
website at www.seniorplc.com/investors
and the webcasts for both events will be made
available on the website for subsequent viewing.
Notes
This Release represents the
Company's dissemination announcement in accordance with the
requirements of Rule 6.3.5 of the Disclosure and Transparency Rules
of the United Kingdom's Financial Services Authority. The
full Annual Report & Accounts 2024 will be made available
online at www.seniorplc.com
on 3 March 2025. Printed copies will be made
available on or soon after 14 March 2025. Other information
on Senior plc, can be found at: www.seniorplc.com
The information contained in this
Release is an extract from the Annual Report & Accounts 2024,
however, some references to Notes and page numbers have been
amended to reflect Notes and page numbers appropriate to this
Release.
The Directors' Responsibility
Statement has been prepared in connection with the full Financial
Statements and Directors' Report as included in the Annual Report
& Accounts 2024. Therefore, certain Notes and parts of
the Directors' Report reported on are not included within this
Release.
|
(1)
|
Adjusted operating profit and
adjusted profit before tax are stated before £1.6m amortisation of
intangible assets from acquisitions (2023 - £2.2m), £3.5m site
relocation costs (2023 - £0.1m), £1.1m US class action lawsuit
(2023 - £nil) and £nil net restructuring costs (2023 -
£5.6m). Adjusted profit before tax is also stated before net
income associated with corporate undertakings of £1.0m (2023 -
£7.6m costs). A reconciliation of adjusted operating profit
to operating profit is shown in Note 4. In 2023, adjusted
earnings per share includes the benefit of a release of £10.5m of
provisions for uncertain tax positions, of which £3.5m relates to
interest (see Note 5 for further details). Adjusted operating
margin is the ratio of adjusted operating profit to
revenue.
|
|
(2)
|
See Note 12b and 12c for derivation
of free cash flow and of net debt, respectively.
|
|
(3)
|
Return on capital employed ("ROCE")
is derived from annual adjusted operating profit (as defined in
Note 4) divided by the average of the capital employed at the start
and end of that twelve-month period, capital employed being total
equity plus net debt (as derived in Note 12c).
|
|
(4)
|
2023 results translated using 2024
average exchange rates - constant currency.
|
|
(5)
|
The details of the new medium-term
financial targets are set out in the separate RNS announcement
published this morning and will be discussed in detail at the
Investor Event presentation to be held today at 10.00
GMT.
|
The following measures are used for
the purpose of assessing covenant compliance for the Group's
borrowing facilities:
|
●
|
EBITDA is adjusted profit before
tax and before interest, depreciation, amortisation and profit or
loss on sale of property, plant and equipment. It also
excludes EBITDA from businesses which have been disposed and
includes 12 months EBITDA for businesses acquired and it is based
on frozen GAAP (pre-IFRS 16). EBITDA for 2024 was
£84.1m.
|
|
●
|
Net debt is defined in Note
12c. It is based on frozen GAAP (pre-IFRS 16) and as required
by the covenant definition, it is restated using 12-month average
exchange rates.
|
|
●
|
Interest is adjusted finance costs
and finance income before net finance income of retirement
benefits. It also excludes interest from businesses which
have been disposed and it is based on frozen GAAP (pre-IFRS
16).
|
|
●
|
The definition of adjusted items in
the Consolidated Income Statement is included in Note 4.
|
The Group's principal exchange rate
for the US Dollar applied in the translation of the Income
Statement and cash flow items at average 2024 rates was $1.28 (2023
- $1.24) and applied in the translation of balance sheet items at
31 December 2024 was $1.25 (31 December 2023 - $1.27).
Note to Editors
Senior is a FTSE 250 international
manufacturing Group with operations in 12 countries. It is
listed on the main market of the London Stock Exchange (symbol
SNR). Senior's Purpose is "we help engineer the transition to
a sustainable world for the benefit of all our
stakeholders."
Senior designs and manufactures high technology components and
systems for the principal original equipment producers in the
worldwide aerospace & defence, land vehicle and power &
energy markets.
Cautionary Statement
This Release contains certain
forward-looking statements. Such statements are made by the
Directors in good faith based on the information available to them
at the time of their approval of this Release and they should be
treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying any such
forward-looking information.
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
Overview of 2024 results
Senior delivered 2024 results in
line with revised expectations, enhanced by a strong cash
performance.
A book-to-bill ratio of 1.12
reflected strong order intake in 2024, underpinning the Group's
confidence in continued growth in 2025 and beyond. Both our
divisions recorded good order intake, with some notable contract
wins including from Safran, Deutsche Aircraft
GmbH, Gail India Limited and land vehicle OEMs (details in
the divisional reviews below), showcasing the broad, diversified
and high-quality nature of our business.
During 2024, Group revenue
increased by 4% on a constant currency basis to £977.1m, with
growth in the Aerospace Division and lower sales in the Flexonics
Division as expected. Exchange rates had an adverse impact of
£25.5m to total sales.
In Aerospace, revenue increased 10%
year-on-year on a constant currency basis. The increase
reflected improved pricing, the ramp up in civil aircraft
production rates and very strong growth of over 50% in Spencer
Aerospace. This was despite 737 MAX volumes being subdued
throughout the year following the Alaska Airlines incident in
January 2024 and the Boeing employee strike from September to
November 2024. We saw a return to growth in sales to
semiconductor equipment customers (which is included in "Adjacent
Markets") and steady growth in the defence market. In
Flexonics, revenue was in line with expectations, down 6% compared
to prior year, on a constant currency basis.
The Group saw robust demand in our downstream oil
and gas and nuclear business, partially offsetting a reduction in
sales from one of our operating businesses to our upstream oil and
gas customers due to a lower share of this
very competitive market sector.
Global land vehicle markets softened as expected in 2024,
however, our sales outperformed key end markets due to the
ramp up of recently won production
contracts.
We measure Group performance on an
adjusted basis, which excludes items that do not directly reflect
the underlying trading performance in the period (see Note
4). References below therefore focus on these adjusted
measures.
The Group's adjusted operating
profit increased by 5% on a constant currency basis to £46.5m
driven by improved profit in Aerospace more than offsetting the
expected volume-related reduction in profit in Flexonics.
Adjusted operating margin increased by 10 basis points in 2024 to
4.8%.
The market backdrop for our
Aerospace Division remains healthy with order books for large
commercial aircraft at record levels, driven by increasing air
passenger demand. There were some supply chain issues for
Airbus and its suppliers through the year, and although there are
clear signs of improvement, we expect there to be ongoing issues to
be managed given the large, planned increases in production.
Boeing also had specific issues with the cap on 737 MAX
production imposed following the Alaska Airlines incident in early
2024 and 3 months of lost production on 737 MAX, 767 and 777 due to
the strike at its factories in The Puget Sound. Boeing have
now started to ramp up production following the recommencement of
operations in December 2024.
Senior responded to these events
dynamically, supporting our customers and controlling our costs.
Nonetheless, these temporary headwinds did affect Aerospace
profitability in 2024.
Flexonics followed a more
predictable path, with Senior outperforming anticipated softer end
markets in 2024.
The Group generated free cash flow
of £17.3m (2023 - £15.5m) in 2024. The improvement from 2023
was a result of lower working capital outflows more than offsetting
higher investment in capital expenditure and higher tax and
interest payments. Cash outflows from working capital were
£17.0m (2023 - £27.6m outflows), reflecting increased inventory,
offset partially by inflows from receivables and payables.
Inventory was higher in Aerospace with planned investment to enable
us to meet the increase in demand from our customers, and as a
result of the impact of the Boeing strike and certain customer
schedule changes in Q4. Gross capital expenditure was £43.2m
(2023 - £35.9m) which was 1.1x depreciation (excluding the impact
of IFRS 16).
Further 2024 financial performance
is described in the Divisional and Financial Review sections
below.
The Board has confidence in the
Group's performance, financial position and future prospects, and
has approved a final dividend of 1.65 pence per share (2023 - 1.70
pence). This will be paid on 30 May 2025 to shareholders on
the register at close of business on 2 May 2025. This brings
the total dividends, paid and proposed for 2024, to 2.40 pence per
share (2023 - 2.30 pence), an increase of 4% year-on-year. We
will continue to follow a progressive dividend policy reflecting
earnings per share, free cash flow generation, market conditions
and dividend cover.
Delivery of Group Strategy
We are committed to a sale of our
Aerostructures business and are making good progress. There
is good buyer interest, we are now at an advanced stage of a sale
process with a small number of parties, and negotiations are
progressing positively. We are focused on completing the sale
process and maximising value for shareholders and will update the
market in due course. This is in line with our strategy to
position Senior as the leading pure play fluid conveyance and
thermal management business.
Senior's Purpose is "to help
engineer the transition to a sustainable world for the benefit of
all our stakeholders". We do this by:
|
●
|
Technology expertise - Using
our technology expertise in fluid conveyance and thermal management
to provide safe and innovative products for demanding applications
in some of the most hostile environments.
|
|
●
|
Customer transition - Enabling
our customers, who operate in some of the hardest-to-decarbonise
sectors, to transition to low-carbon and clean energy
solutions.
|
|
●
|
Climate action - Staying at the
forefront of climate disclosure and action by ensuring our own
operations achieve our Net Zero commitments.
|
Our extensive design expertise,
intellectual property and know-how supports our strategic focus.
We offer pivotal technologies for emissions reduction and
environmental efficiency, whether that is for cleaner and more
efficient conventional technology or new low carbon product
offerings.
We continue to invest in markets
where we believe there is significant growth potential and where
the Group's skills and knowledge can be exploited, such as
aerospace highly engineered standard parts/components. This
market has high barriers to entry and attractive returns. We
are broadening our product portfolio for specific products such as
flanges, couplings and fittings. Our high-pressure hydraulic
fittings business, Spencer Aerospace ("Spencer") has continued to
grow strongly with sales up by over 50% in 2024 compared to 2023
and has now grown over 135% since we acquired the business in late
2022.
Further information on Senior's
strategy and strategic priorities can be found on pages 34 to 35 of
our Annual Report & Accounts 2024. In addition, we will
be providing further details on delivery of our strategy at our
Investor Event today at 10.00 GMT.
Market Overview
Civil Aerospace (46% of
Group)
The civil aerospace sector
continued its recovery with air traffic increasing in all regions
during 2024. According to the International Air Transport
Association ("IATA"), the latest data showed that total demand
during the year, measured in Revenue Passenger Kms (RPKs),
increased by 10% year-on-year. Air traffic is expected to
continue to grow as incomes increase, especially in developing
markets in Asia. The long-term demand for new aircraft is
forecast to grow by 3-4% per annum driven by growth in air traffic
and ongoing fleet replacement.
Airbus delivered 766 aircraft in
2024, compared to 735 deliveries in 2023. Airbus recently
confirmed production rate targets are now: A220, 14 per month in
2026; A320 family, 75 per month in 2027; A330 maintaining 4 per
month; and A350, 12 per month in 2028.
In 2024, Boeing delivered 348
aircraft compared to 528 deliveries in 2023. It has been well-documented that
Boeing faced challenges in 2024. The Alaska Air 737 MAX
incident in January 2024 led to the FAA imposing strict controls
over Boeing production and capped production at 38 aircraft per
month until the FAA agrees to further increases. The
situation was exacerbated by an employee strike at Boeing's Puget
Sound facilities which lasted for 53 days during which time no
aircraft were produced at the affected facilities.
Production of aircraft resumed in
mid-December.
Boeing reduced the production rate
of its 787 model from 5 aircraft per month to 3 for much of the
year due to supply chain constraints, although production returned
to 5 per month by the year end. Boeing further announced that
the first delivery of the 777X will now be in 2026. In
January 2025, the 777X program resumed FAA certification flight
testing.
Embraer is forecasting that it will
deliver between 77-85 commercial aircraft in 2025, up from 73 in
2024. It is also forecasting to deliver between 145-155
business jets in 2025, having delivered 130 in 2024. Global
business jet activity was down by 1% year-on-year in 2024 according
to WingX. Global deliveries of business jets are anticipated
to increase by 11% year-on-year in 2025 and by 2% per annum over
the next decade, according to Honeywell's Global Business Aviation
Outlook.
Defence (13% of
Group)
Senior's sales to the Defence
sector are primarily focused on US military aircraft platforms such
as the F-35 and C-130J.
Lockheed Martin has stated that
they will continue to produce 156 F-35 aircraft per year, having
delivered 110 in 2024. The total planned purchases of F-35s
are over 3,500, of which 31% is for the international
market.
Adjacent Markets (9% of
Group)
Sales from our Aerospace operating
businesses into end markets outside of the civil aerospace and
defence markets are classified under "Adjacent Markets" and include
sales into the semiconductor equipment, space and medical
markets.
In the semiconductor sector, global
sales of wafer fabrication equipment grew by 7% during 2024.
This market is forecast to grow by a further 7% in 2025
driven by demand for AI-related chips. (Source:
Semi.org)
Land Vehicle (19% of
Group)
Demand in heavy-duty truck markets
during 2024 weakened in both Europe and North America, while the
off-highway market remained subdued and light vehicle markets
experienced mixed conditions.
According to Americas Commercial
Transportation ("ACT") research, North American heavy-duty truck
production declined by 2% in 2024 compared to 2023, which was
better than originally anticipated. This decline was due to
ongoing overcapacity in the for-hire freight-logistics sector in
the USA, which has resulted in low levels of profitability and
fleet investment in the Class 8 "tractor" sector. ACT
forecast production to decline by 5% in 2025 and rebound in 2026 to
12% growth as a result of the pre-buy ahead of the planned 2027
emission change.
Weak economic fundamentals,
particularly in Germany, led to lower orders for and production of
heavy-duty trucks in Europe during 2024. S&P Global
("S&P") data shows that production was down 26% year-on-year,
weaker than originally anticipated. S&P predict
production in 2025 to increase by 2%.
In the off-highway sector, demand
for construction vehicles decreased in both North America and
Europe in 2024. Demand for mining equipment remained positive
in all major markets. Industry participants are forecasting
that overall demand in the off-highway sector in 2025 will decline
in North America between 0% - 10%, be flat in Europe and increase
between 0% - 10% in China.
European light vehicle production
declined by 7% in 2024 after two years of post-pandemic catch-up,
as supply and demand became more balanced. Production in
North America fell by 2% in 2024, as four years of inventory
restocking came to an end. In India, the other light-vehicle
market to which Senior has significant exposure, production in 2024
increased by 4%. This relatively low rate, by Indian market
standards, was due to high levels of inventory. S&P is
forecasting that production in 2025 will fall by 5% in Europe, by
2% in North America and increase by 6% in India.
Power & Energy (13% of Group)
2024 saw growth in upstream oil
& gas expenditure slowing, especially in the Middle East, while
remaining subdued in North America.
Activity in the downstream sector
remains focussed in the Middle East and Asia, where cheap feedstock
and economic growth respectively is driving demand.
Global electricity consumption grew
by 4.3% in 2024 and is forecast to grow at 4% annually through
2027. Demand is being driven primarily by economic growth,
urbanisation and the adoption of EVs.
Sustainability
Senior continues to be at the
forefront of sustainability reporting and action. We believe
that this is truly important and, evidently, so do many of our
customers who are including commitment and progress on
sustainability in their supplier selection decision-making process.
In 2024, we made significant strides, including meeting our
Near-Term science-based target for the reduction of greenhouse
gases, a year ahead of the 2025 target date, and progressing our
Double Materiality Assessment (DMA). Looking ahead to 2025,
we will continue our focus on sustainability by supporting our
customers in their carbon reduction efforts and, having already
achieved our Near Term Scope 1 & 2 SBTi accredited targets, our
full focus now turns to meeting our 2040 Net Zero Scope 1, 2 and 3
targets.
In 2024, we achieved significant
milestones in our sustainability journey:
Environmental
|
●
|
Awarded 'A' leadership score by CDP
for our disclosure and action on climate change for
2024.
|
|
●
|
We continued to reduce our Scope 1
and 2 greenhouse gas emissions, achieving a reduction of 33%
against our 2018 baseline, meeting our Near-Term science-based
target ahead of the 2025 target date.
|
|
●
|
Electricity sourced from renewable
energy increased to 52%, from 48% in 2023.
|
|
●
|
We extended our support to
suppliers yet to set carbon reduction targets and updated our
Sustainable Sourcing Policy.
|
Social
|
●
|
We undertook our annual Global
Employee Engagement Survey in May 2024 and were pleased to see
improvements in the participation rate, engagement, and health
& wellbeing scores.
|
|
●
|
Our Lost Time Injury Illness &
Illness Rate in 2024 reduced by over 40% to 0.19, down from 0.32 in
2023.
|
|
●
|
Currently, 56% of
the Board Directors are female, including the Chair of the
Audit Committee, the Senior Independent Director, who is also Chair
of the Remuneration Committee, and the Group Finance
Director. The Chair of the Audit Committee is also the
non-executive Director with Board responsibility for employee
engagement. Two of the Directors (22%) are
from ethnic minority backgrounds.
|
Governance
|
●
|
We deployed an enhanced Group
Anti-Fraud Policy.
|
|
●
|
We carried out a Group-level double
materiality assessment. The results of the assessment will
inform Senior's approach to enhancing and evolving its
sustainability strategy.
|
Further information on Senior's
sustainability activities can be found on pages 12 to 31 of our
Annual Report & Accounts 2024.
Outlook
We are committed to a sale of our
Aerostructures business and are making good progress. There
is good buyer interest, we are now at an advanced stage of a sale
process with a small number of parties, and negotiations are
progressing positively. We are focused on completing the sale
process and maximising value for shareholders and will update the
market in due course. This is in line with our strategy to
position Senior as the leading pure play fluid conveyance and
thermal management business.
For the year ahead, the Board
anticipates good growth for the Group, in line with its
expectations. We are closely monitoring the impact on global
trade from potential tariff changes.
Increasing aircraft build rates,
operational efficiency benefits and improved contract pricing are
expected to drive good growth in Aerospace in 2025, with H2
expected to be higher than H1.
For the full year, Aerostructures
is expected to improve from a loss making position in 2024 to an
operating profit range of £9m to £11m in 2025, with the large
majority of that being earned in H2.
We expect Flexonics performance in
2025 to be broadly similar to 2024.
In land vehicles, the ramp up of
programmes recently won means we expect our 2025 performance to be
broadly similar to 2024, despite some softness in North America and
Germany. In power and energy, activity levels are expected to
be similar to 2024.
Our strategy of positioning Senior
as a pure play fluid conveyance and thermal management business in
attractive and structurally resilient core markets; with active
portfolio management; combined with our highly relevant technical
capabilities; and sector-leading sustainability credentials,
provides confidence of continuing performance improvements for the
Group. Reflecting the Board's confidence, we have today
announced new and improved medium term financial targets which will
be discussed in detail at the Investor Event today at 10.00
GMT.
DAVID SQUIRES
Group Chief Executive
Officer
DIVISIONAL REVIEW
Aerospace
Division
In 2024, the Aerospace Division
represented 68% (2023 - 64%) of Group revenue, consisting
of 14 operations. These are located
in North America (six), the United Kingdom (four), France (two),
Thailand and Malaysia. This Divisional review is on a
constant currency basis, whereby 2023 results have been translated
using 2024 average exchange rates and on an adjusted basis to
exclude amortisation of intangible assets from acquisitions, site
relocation costs, US class action lawsuit and net restructuring
costs. The Division's operating results on a constant
currency basis are summarised below:
|
|
2024
|
|
2023
|
(1)
|
Change
|
|
Revenue
|
£660.8m
|
|
£601.4m
|
|
+9.9%
|
|
Adjusted operating
profit
|
£30.4m
|
|
£26.6m
|
|
+14.3%
|
|
Adjusted operating
margin
|
4.6%
|
|
4.4%
|
|
+20bps
|
|
(1)
|
2023 results translated using 2024
average exchange rates - constant currency.
|
Divisional revenue increased by
£59.4m (9.9%) to £660.8m (2023 - £601.4m) whilst adjusted operating
profit increased by £3.8m (14.3%) to £30.4m (2023 -
£26.6m).
|
Revenue Reconciliation
|
£m
|
|
2023 revenue
|
601.4
|
|
Civil aerospace
|
46.6
|
|
Defence
|
1.8
|
|
Other adjacent markets
|
11.0
|
|
2024 revenue
|
660.8
|
Contract Wins
The Aerospace Division has been
awarded several new or extended contracts in 2024 from the
following customers:
|
●
|
Deutsche Aircraft. A new life
of programme contract for the design, development and manufacture
of high-pressure ducting for the sustainable D328eco aircraft from
our SSP business in California and our Bird Bellows business in the
UK.
|
|
●
|
Safran Aircraft Engines.
Awarded a multi-year contract for the supply of Maintenance,
Repair and Overhaul (MRO) services for the CFM56 engine to be
undertaken at Senior Aerospace's Ermeto facility in Blois,
France.
|
|
●
|
Airbus SA. A multi-year
contract extension for the manufacture and supply of various
aerostructures parts from our businesses in Thailand and
Malaysia.
|
|
●
|
Airbus Atlantic. A new
contract for the supply of business class seat structures from our
business in Thailand.
|
|
●
|
Spirit AeroSystems. A 5-year
contract extension for the supply of large diameter precision
formed and machined structural components for various Boeing
commercial programmes from our Jet Products business in
California.
|
|
●
|
Collins Aerospace (RTX). New
multi-year production contracts for the supply of precision formed
and machined thrust reverser structural components for commercial
aerospace platforms at Airbus and Boeing from our Jet Products
business in California.
|
|
●
|
Rolls-Royce. A new 5-year
contract for the supply of aerofoils for the Pearl engine family
and manufacturing will be undertaken at our business in
Thailand.
|
Performance
Aerospace Division revenue in 2024
increased by 9.9% year-on-year on a constant currency basis,
benefiting from increase in demand across all market sectors.
The increase year-on-year reflected the ongoing ramp up in civil
aircraft production rates, notwithstanding 737 MAX volumes being
subdued following the Alaska Airlines incident in January 2024 and
the Boeing employee strike from September to November 2024.
Other adjacent markets (mainly the semiconductor equipment market)
and defence also contributed to growth in the division.
The civil aerospace sector had good
growth during the period with Senior's sales increasing by 11.6%
compared to prior year. This was as a result of increased
deliveries to Airbus programmes, higher prices, activity levels
increasing in our Thailand business as a key supplier recovers from
a fire last year as well as, continued strong growth in revenue
from Spencer Aerospace (more than 50%). 22% of civil
aerospace sales were from widebody aircraft in 2024, with the other
78% sales being from single aisle, regional and
business jets.
Total revenue from the defence
sector increased by £1.8m (1.4%) primarily due to higher sales on
the F35 programme.
Revenue derived from other adjacent
markets such as space, power & energy, medical and
semiconductor equipment, where the Group manufactures products
using very similar technology to that used for certain aerospace
products, increased by £11.0m (15.4%) due to price increases and
semiconductor equipment market starting to recover.
The market backdrop for our
Aerospace Division remains healthy with order books for large
commercial aircraft at record levels, driven by increasing air
passenger demand. There were some supply chain issues for
Airbus and its suppliers through the year, and although there are
clear signs of improvement, we expect there to be ongoing issues to
be managed given the large, planned increases in production.
Boeing also had specific issues with the cap on 737 MAX production
imposed following the Alaska Airlines incident in early 2024 and 3
months of lost production on 737 MAX, 767 and 777 due to the strike
at its factories in The Puget Sound. Boeing have now started
to ramp up production following the recommencement of operations in
December 2024.
Senior responded to these events
dynamically, supporting our customers and controlling our
costs. Nonetheless, these temporary headwinds did affect
Aerospace profitability in 2024 compared to original
expectations. During the period, adjusted
operating profit increased by 14.3% to £30.4m (2023 - £26.6m) and
the adjusted operating margin increased by 20 basis points to 4.6%
(2023 - 4.4%). This increased profitability reflected the benefits of price
increases and higher volumes.
Outlook
Increasing aircraft build rates,
operational efficiency benefits and improved contract pricing are
expected to drive good growth in Aerospace in 2025, with H2
performance expected to be higher than H1.
For the full year, Aerostructures
is expected to improve from a loss making position in 2024 to an
operating profit range of £9m to £11m in 2025, with the large
majority of that being earned in H2.
Supplementary information - Aerospace division sales and
operating profit
|
|
Revenue
|
Adjusted
trading and operating profit
|
|
|
Year
ended
2024
|
|
Year
ended
2023
|
(1)
|
Year
ended
2022
|
(1)
|
Year
ended
2024
|
|
Year
ended
2023
|
(1)(2)
|
Year
ended
2022
|
(1)
|
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
£m
|
|
|
Aerostructures
|
272.4
|
|
246.7
|
|
235.4
|
|
(6.5)
|
|
(11.1)
|
|
(3.7)
|
|
|
Aerospace excluding
Aerostructures
|
391.1
|
|
357.7
|
|
306.5
|
|
36.9
|
|
37.7
|
|
23.4
|
|
|
Eliminations
|
(2.7)
|
|
(3.0)
|
|
(2.7)
|
|
-
|
|
-
|
|
-
|
|
|
Total Aerospace
|
660.8
|
|
601.4
|
|
539.2
|
|
30.4
|
|
26.6
|
|
19.7
|
|
|
(1)
|
2023 and 2022 results translated
using 2024 average exchange rates - constant currency.
|
|
(2)
|
2023 results included benefit from
retrospective inflationary cost recoveries.
|
Flexonics
Division
The Flexonics Division
represents 32% (2023 - 36%) of Group revenue and
consists of 12 operations which are located in North America
(four), continental Europe (two), the United Kingdom (two), South Africa, India, and China (two including
the Group's 49% equity stake in a land vehicle product joint
venture). This Divisional review, presented before the
share of the joint venture results, is on a constant currency
basis, whereby 2023 results have been translated using 2024 average
exchange rates and on an adjusted basis to exclude site relocation
costs and net restructuring costs. The Division's operating
results on a constant currency basis are summarised
below:
|
|
2024
|
|
2023
|
(1)
|
Change
|
|
Revenue
|
£317.7m
|
|
£337.5m
|
|
-5.9%
|
|
Adjusted operating
profit
|
£35.1m
|
|
£36.2m
|
|
-3.0%
|
|
Adjusted operating
margin
|
11.0%
|
|
10.7%
|
|
+30bps
|
|
(1)
|
2023 results translated using 2024
average exchange rates - constant currency.
|
Divisional revenue decreased by
£19.8m (-5.9%) to £317.7m (2023 - £337.5m) and adjusted operating
profit decreased by £1.1m (-3.0%) to £35.1m (2023 -
£36.2m).
|
Revenue Reconciliation
|
£m
|
|
2023 revenue
|
337.5
|
|
Land vehicle
|
(7.2)
|
|
Power & energy
|
(12.6)
|
|
2024 revenue
|
317.7
|
Contract Wins
The Flexonics Division won a number
of important contracts in 2024 which include:
|
●
|
Contract with Gail India Limited to
manufacture and deliver over 100 expansion joints for a new Catofin
project, supplied by our Pathway business in the USA.
|
|
●
|
New contract signed with European
truck OEM to supply tubes and pipes for a new engine to be used in
multiple platforms with manufacturing being undertaken in Flexonics
Olomouc, Cape Town and Saltillo facilities.
|
|
●
|
Several new or extended contracts
with North American heavy-duty truck OEMs with supply from our
Bartlett business, with facilities in the USA and
Mexico.
|
|
●
|
New contracts with passenger
vehicle OEMs in Europe supplying metal pipes and tubing for various
engines from our Olomouc business in the Czech Republic.
|
Performance
Flexonics Division revenue in 2024
decreased by 5.9% year-on-year on a constant currency basis.
Strong revenue growth from downstream oil and gas and
nuclear, was offset by lower upstream oil and gas business and the
anticipated softness in land vehicle markets.
Global land vehicle markets
softened as expected in 2024, nevertheless, our sales outperformed
key end markets. Group land vehicle sales decreased by 3.7%
driven by softer market conditions which were partially mitigated
by the benefit from the launch and ramp up of new programmes in
North America and Europe. Senior's sales to the North
American truck market decreased by £1.2m (-2.0%) with market
production decreasing by 2.3%. Our
North American off-highway sales decreased £5.2m (-13.5%).
Sales to other truck and off-highway regions, including
Europe and India, were flat as growth from India offset reduced
customer demand in Europe. The European truck and off-highway
market decreased by 26% in 2024 primarily
due to the weakness of the German economy. Senior's sales,
however, only decreased by 1.6% in the period as we benefited from
the launch and ramp of new programme wins. For example,
Senior Flexonics Olomouc benefited from higher sales from a new
project launched last year. There was also a one-off benefit
from a large order placed by a Swedish OEM to our Senior Flexonics
Kassel business. Group sales to passenger vehicle markets
decreased by £0.8m (-1.7%) in the year.
In the Group's power & energy
markets sales decreased by £12.6m (-9.5%) in the year. Sales
to other power & energy markets increased by £4.8m (5.4%)
reflecting growth in sales to power generation, nuclear and
renewables industry customers. Sales to oil and gas customers
decreased by £17.4m (‑32.8%). The Group saw robust demand in
our downstream oil and gas business, partially offsetting a
reduction in sales from one of our operating businesses to our
upstream oil and gas customers due to a lower share of this very competitive
business.
Adjusted operating profit decreased
by £1.1m compared to prior period as a result of lower sales.
Nevertheless, operational efficiencies, lower costs and favourable
product mix helped increase margins by 30 basis points to 11.0%
(2023 -10.7%).
Outlook
We expect Flexonics performance in
2025 to be broadly similar to 2024.
In land vehicles, the ramp up of
programmes recently won means we expect our 2025 performance to be
broadly similar to 2024, despite some softness in North America and
Germany. In power and energy, activity levels are expected to
be similar to 2024.
FINANCIAL REVIEW
Group revenue
Group revenue was £977.1m (2023 -
£963.5m). Excluding the adverse exchange rate impact of
£25.5m, Group revenue increased by £39.1m (4.2%) with growth in the
Aerospace Division and an anticipated reduction in the Flexonics
Division.
Operating profit
Adjusted operating profit increased
by £0.7m (1.5%) to £46.5m (2023 - £45.8m). Excluding the
adverse exchange rate impact of £1.6m, adjusted operating profit
increased by £2.3m (5.2%) on a constant currency basis. After
accounting for £1.6m amortisation of intangible assets from
acquisitions (2023 - £2.2m), £3.5m site relocation costs (2023 -
£0.1m), £1.1m US class action lawsuit (2023 - £nil) and £nil net
restructuring costs (2023 - £5.6m), reported operating profit was
£40.3m (2023 - £37.9m).
The Group's adjusted operating
margin of 4.8% increased by 10 basis points on a constant currency
basis, with increases in both Aerospace and Flexonics divisions.
Adjusted operating margin in Aerospace benefited from price
increases and higher volumes. Operational efficiencies, lower
costs and favourable product mix helped Flexonics more than offset
the impact of lower volumes.
Finance costs and income
Finance costs, net of finance
income and before fair value changes in acquisition consideration
increased to £13.5m (2023 - £7.5m) and comprise IFRS 16 interest
charge on lease liabilities of £3.4m (2023 - £2.9m), net finance
income on retirement benefits of £2.0m (2023 - £2.1m) and net
interest charge of £12.1m (2023 - £10.2m). Also in 2023,
interest unwind on uncertain tax positions of £3.5m was included,
as described further below in the tax section. The £1.9m
increase in net interest charge was driven by higher underlying
interest rates on variable rate debt and higher levels of
indebtedness in 2024 versus the prior year.
Before fair value changes in
acquisition consideration, gross finance costs were £21.9m (2023 -
£17.6m) and gross finance income was £8.4m (2023 - £10.1m including
£3.5m benefit of interest unwind on uncertain tax positions).
The change in fair value on acquisition consideration was net
income of £2.2m (2023 - £2.9m interest unwind), comprising £3.6m
income, relating to the 2025 earnout target no longer expected to
be payable, as a result of the impact of the well publicised 737
MAX subdued volumes, partly offset by £1.4m interest
unwind.
Profit before tax
Adjusted profit before tax
decreased by 14% to £33.0m (2023 - £38.3m) reflecting higher net
interest costs including the non-repeat of £3.5m prior year benefit
of interest unwind on uncertain tax positions. Reported
profit before tax increased by 22% to £27.8m (2023 - £22.8m) mainly
due to operating profit and corporate undertakings favourable
movements partly offset by non-repeat prior year interest unwind
benefit. The reconciling items between adjusted profit and
reported profit before tax are shown in Note 4.
Tax charge/credit
The adjusted tax rate for the year
was 10.0% charge (2023 - 11.0% credit), being a tax charge of £3.3m
(2023 - £4.2m credit) on adjusted profit before tax of £33.0m (2023
- £38.3m). The adjusted tax rate benefitted from the
recognition of a £2.2m deferred tax asset in respect of historical
tax losses, enhanced R&D deductions in the US and the
geographical mix of taxable profits. In 2023, the adjusted
tax rate also benefitted from a release of £7.0m of provision for
uncertain tax positions. This release and associated interest
release of £3.5m followed a series of steps to simplify the legal
ownership of the Group's Americas legal entity holding
structure.
The reported tax rate was 6.8%
charge, being a tax charge of £1.9m on reported profit before tax
of £27.8m. This included £1.4m net tax credit against items
excluded from adjusted profit before tax, of which £0.4m credit
related to amortisation of intangible assets from acquisitions,
£1.0m credit related to site relocation costs, £0.3m credit related
to US class action lawsuit and £0.3m charge related to corporate
undertakings in the year.
The 2023 reported tax rate was
36.4% credit, being a tax credit of £8.3m on reported profit before
tax of £22.8m. This included £7.0m credit related to the
release of provision for uncertain tax positions as described above
and £4.1m net tax credit against items excluded from adjusted
profit before tax, of which £0.6m credit related to amortisation of
intangible assets from acquisitions, £1.5m credit related to net
restructuring costs, £0.1m credit related to site relocation costs
and £1.9m credit related to corporate undertakings in the
year.
Cash tax paid was £7.4m (2023 -
£5.6m) and is stated net of refunds received of £1.2m (2023 -
£2.8m) in respect of UK R&D expenditure credit payments and tax
paid in prior periods.
Earnings per share
The weighted average number of
shares, for the purposes of calculating undiluted earnings per
share, increased to 414.3 million (2023 - 413.3 million). The
increase arose principally due to shares released from the employee
benefit trust to satisfy the vesting of certain share-based
payments during 2024, partly offset by the purchase of shares held
by the trust. The adjusted earnings per share was 7.17 pence
(2023 - 10.28 pence, which included a benefit of 2.54 pence from
the release of the provision for uncertain tax positions as
described above).
Basic earnings per share was 6.25
pence (2023 - 7.52 pence). See Note 7 for details of the
basis of these calculations.
Return on capital employed
("ROCE")
ROCE, a key performance indicator
for the Group as defined in the Notes to the Financial Headlines,
decreased by 30 basis points to 6.8% (2023 - 7.1%). The
decrease in ROCE was mainly a result of higher inventory and
investment in growth not yet fully offset by the growth in profit,
which was impacted by near-term temporary customer led
headwinds.
Cash flow
The Group generated operating cash
flow of £39.3m (2023 - £34.0m), a cash conversion of 85% of
adjusted operating profit. Free cash flow was £17.3m in 2024
(2023 - £15.5m) as set out in the following table:
|
|
2024
£m
|
2023
£m
|
|
Operating profit
|
40.3
|
37.9
|
|
Amortisation of intangible assets
from acquisitions
|
1.6
|
2.2
|
|
Site relocation costs
|
3.5
|
0.1
|
|
US class action lawsuit
|
1.1
|
-
|
|
Net restructuring costs
|
-
|
5.6
|
|
Adjusted operating
profit
|
46.5
|
45.8
|
|
Depreciation (including
amortisation of software)
|
49.0
|
49.5
|
|
Working capital and provisions
movement, net of restructuring items
|
(17.0)
|
(27.6)
|
|
Pension contributions
|
(0.8)
|
(1.4)
|
|
Pension service and running
costs
|
1.9
|
1.3
|
|
Other items(1)
|
2.8
|
1.6
|
|
Capital expenditure
|
(43.2)
|
(35.9)
|
|
Sale of property, plant and
equipment
|
0.1
|
0.7
|
|
Operating cash flow
|
39.3
|
34.0
|
|
Interest paid, net
|
(14.6)
|
(12.9)
|
|
Income tax paid, net
|
(7.4)
|
(5.6)
|
|
Free cash flow
|
17.3
|
15.5
|
|
Site relocation costs
paid
|
(1.6)
|
-
|
|
Net restructuring costs
paid
|
(0.5)
|
(2.1)
|
|
US pension settlement
|
-
|
(0.9)
|
|
Corporate undertakings
|
(13.0)
|
(25.8)
|
|
Dividends paid
|
(10.1)
|
(6.6)
|
|
Dividends from Joint
Venture
|
3.0
|
-
|
|
Purchase of shares held by employee
benefit trust net of repayments
|
(4.9)
|
(5.6)
|
|
Net cash flow
|
(9.8)
|
(25.5)
|
|
Effect of foreign exchange rate
changes
|
(3.1)
|
8.5
|
|
IFRS 16 non-cash additions and
modifications including acquisition
|
(12.9)
|
(7.9)
|
|
Change in net debt
|
(25.8)
|
(24.9)
|
|
Opening net debt
|
(203.8)
|
(178.9)
|
|
Closing net debt
|
(229.6)
|
(203.8)
|
|
(1)
|
Other items comprises £4.5m
share-based payment charges (2023 - £4.1m), £(1.3m) profit on share
of joint venture (2023 - £(1.0m)), £(0.4m) working capital and
provision currency movements (2023 - £(1.3m)) and £nil profit on
sale of fixed assets (2023 - £(0.2m)).
|
Capital expenditure
Gross capital expenditure of £43.2m
(2023 - £35.9m) was 1.1 times depreciation excluding the impact of
IFRS 16 (2023 - 0.9 times). The disposal of property, plant
and equipment raised £0.1m (2023 - £0.7m). 2025 capital
investment is expected to be above depreciation (excluding the
impact of IFRS 16), the majority of which is investment on growth
projects where contracts have been secured, with the rest on
important replacement equipment for current production and
sustainability related items.
Working capital
Working capital increased by £18.1m
in 2024 to £179.0m as at 31 December 2024 (31 December 2023 -
£160.9m), of which £1.9m increase related to foreign currency
movements. Inventory was higher particularly in Aerospace
with planned investment to enable us to meet the strong increase in
demand from our customers and was also as a result of 737 MAX
production being lower than initially resourced for, exacerbated by
the Boeing employee strike in the Puget sound area, coupled with
schedule changes in Q4 from a customer who is an Airbus tier one
supplier. Receivables were higher as a result of revenue
growth. In 2024, working capital increased as a percentage of
sales by 160 basis points to 18.3% (2023 - 16.7%). We are
likely to see an increase in working capital over the coming year
to support the growth anticipated in Aerospace, however working
capital as a percentage of sales is expected to reduce towards the
17% level.
Retirement benefit
schemes
The retirement benefit surplus in
respect of the Group's UK defined benefit pension plan ("the UK
Plan") decreased by £5.0m to £43.5m (31 December 2023 - £48.5m) due
to £6.0m net actuarial losses and £1.2m running costs partly offset
by £2.2m net interest income. Retirement benefit deficits in
respect of the US and other territories decreased by £1.2m to £6.8m
(31 December 2023 - £8.0m).
The latest triennial actuarial
valuation of the UK Plan as at 5 April 2022 showed a surplus of
£24.5m (5 April 2019 - deficit of £10.2m). The Group's
deficit reduction cash contributions, including administration
costs, to the UK Plan ceased on 30 June 2022.
The estimated cash contributions
expected to be paid during 2025 in the US funded plans is £0.4m
(£0.4m was paid in 2024).
Net debt
Net debt which includes IFRS 16
lease liabilities increased by £25.8m to £229.6m at 31 December
2024 (31 December 2023 - £203.8m). As noted in the cash flow
above, the Group generated net cash outflow of £9.8m (as defined in
Note 12), before £3.1m adverse foreign currency movements and
£12.9m non-cash changes in lease liabilities due to additions and
modifications.
Net debt excluding IFRS 16 lease
liabilities of £76.2m (31 December 2023 - £71.8m) increased by
£21.4m to £153.4m at 31 December 2024 (31 December 2023 - £132.0m),
due to free cash inflow of £17.3m and £3.0m dividend received from
the Joint Venture being more than offset by £15.0m outflow for
dividends and net purchase of shares, £13.0m cash outflow in
respect of corporate undertakings, £10.0m capital repayment of
leases, £2.1m net cash outflows for site relocation and
restructuring and £1.6m adverse foreign currency
movements.
Funding and Liquidity
As at 31 December 2024, the Group's
gross borrowings excluding leases and transaction costs directly
attributable to borrowings were £200.0m (31 December 2023 -
£181.0m), with 64% of the Group's gross borrowings denominated in
US Dollars (31 December 2021 - 61%). Cash and bank balances
were £45.5m (31 December 2023 - £47.6m).
The maturity of these borrowings,
together with the maturity of the Group's committed facilities, can
be analysed as follows:
|
|
Gross
borrowings
£m
|
(2)
|
Committed
facilities
£m
|
|
Within one year
|
75.0
|
|
75.0
|
|
In the second year
|
9.5
|
|
34.8
|
|
In years three to five
|
75.5
|
|
162.1
|
|
After five years
|
40.0
|
|
40.0
|
|
|
200.0
|
|
311.9
|
|
(2)
|
Gross borrowings include other
loans and committed facilities, but exclude leases of £76.2m and
transaction costs directly attributable to borrowings of
£(1.1)m.
|
At the year-end, the Group had
committed facilities of £311.9m comprising private placement debt
of £162.1m and revolving credit facilities of £149.8m. The
Group is in a strong funding position, with headroom at 31 December
2024 of £158.5m in cash and undrawn facilities.
In the first half, the US RCF of
$50m was extended by a year and will now mature in June
2026. New private placement loan
notes of $40m (£32m) were issued and drawn down in February 2025,
carrying an interest rate of 5.46% and are due for repayment in
February 2029. These new loan notes have refinanced the
maturing £27m private placement loan notes that were repaid in
January 2025.The weighted average maturity
of the Group's committed facilities at 31 December 2024 was 2.5
years.
The Group has £nil (2023 - £1.8m)
of uncommitted borrowings which are repayable on demand.
The Group has two covenants for
committed borrowing facilities, which are tested at June and
December: the Group's net debt to EBITDA (defined in the Notes to
the Financial Headlines) must not exceed 3.0x and interest cover,
the ratio of EBITDA to interest must be higher than 3.5x. At
31 December 2024, the Group's net debt to EBITDA was 1.8x and
interest cover was 7.0x, both comfortably within covenant
limits.
Going concern and
viability
In accordance with provisions 30
and 31 of the 2018 UK Corporate Governance Code, the Directors have
concluded that there is a reasonable expectation as to the Group's
longer-term viability and have continued to adopt the going concern
basis in preparing the Financial Statements. The full
viability statement can be found on page 68 of the Annual Report
& Accounts 2024.
In assessing going concern, taking
into account the level of cash and available committed facilities
the Directors concluded that the Group has sufficient funds, and is
forecast to be in compliance with debt covenants at all measurement
dates, to allow it to operate for the foreseeable future (a period
of at least 12 months from the date of approval of the Financial
Statements), even in a severe but plausible downside
scenario.
In forming their conclusion, the
Board has undertaken a rigorous assessment of the financial
forecasts, key uncertainties, sensitivities, and has reviewed a
severe but plausible downside scenario, which reflects the
probability weighted and cumulative estimated effects of the
Group's principal risks and uncertainties as disclosed on pages 54
to 59 of the Annual Report & Accounts 2024.
Risks and uncertainties
The principal risks and
uncertainties faced by the Group are set out in detail on pages 54
to 59 of the Annual Report & Accounts 2024.
Responsibility statement of the Directors in respect of the
Annual Report & Accounts 2024
We confirm that to the best of our
knowledge:
1. the Financial
Statements, as included in the Annual Report & Accounts 2024,
prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the company and the
undertakings included in the consolidation taken as a whole;
and
2. the Strategic
Report, set out in the Annual Report & Accounts 2024, includes
a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
By Order of the Board
|
|
|
|
David Squires
Group Chief Executive Officer
28 February 2025
|
Bindi Foyle
Group Finance Director
28 February 2025
|
Consolidated Income Statement
For the year ended 31 December
2024
|
|
|
Notes
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
3
|
|
977.1
|
|
963.5
|
|
Trading profit
|
|
|
|
39.0
|
|
36.9
|
|
Share of joint venture
profit
|
|
9
|
|
1.3
|
|
1.0
|
|
Operating profit
(1)
|
|
3
|
|
40.3
|
|
37.9
|
|
Finance income
|
|
|
|
10.6
|
|
10.1
|
|
Finance costs
|
|
|
|
(21.9)
|
|
(20.5)
|
|
Corporate undertakings
|
|
4
|
|
(1.2)
|
|
(4.7)
|
|
Profit before tax
(2)
|
|
|
|
27.8
|
|
22.8
|
|
Tax (charge)/credit
|
|
5
|
|
(1.9)
|
|
8.3
|
|
Profit for the period
|
|
|
|
25.9
|
|
31.1
|
|
Attributable to:
|
|
|
|
|
|
|
|
Equity holders of the
parent
|
|
|
|
25.9
|
|
31.1
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic (3)
|
|
7
|
|
6.25p
|
|
7.52p
|
|
Diluted (4)
|
|
7
|
|
6.12p
|
|
7.32p
|
|
(1) Adjusted operating profit
|
|
4
|
|
46.5
|
|
45.8
|
|
(2) Adjusted profit before tax
|
|
4
|
|
33.0
|
|
38.3
|
|
(3) Adjusted earnings per share
|
|
7
|
|
7.17p
|
|
10.28p
|
|
(4) Adjusted and diluted earnings per share
|
|
7
|
|
7.01p
|
|
10.00p
|
Consolidated Statement of Comprehensive
Income
For the year ended 31 December
2024
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Profit for the period
|
25.9
|
|
31.1
|
|
Other comprehensive
income:
|
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
(Losses)/gains on foreign exchange
contracts - cash flow hedges during the period
|
(2.8)
|
|
2.7
|
|
Reclassification adjustments for
losses included in profit
|
(0.1)
|
|
0.9
|
|
(Losses)/gains on foreign exchange
contracts - cash flow hedges
|
(2.9)
|
|
3.6
|
|
Exchange differences on translation
of overseas operations
|
4.0
|
|
(16.9)
|
|
Tax relating to items that may be
reclassified
|
0.8
|
|
(0.9)
|
|
|
1.9
|
|
(14.2)
|
|
Items that will not be reclassified
subsequently to profit or loss:
|
|
|
|
|
Actuarial losses on defined benefit
pension schemes
|
(4.8)
|
|
(2.6)
|
|
Tax relating to items that will not
be reclassified
|
1.1
|
|
0.6
|
|
|
(3.7)
|
|
(2.0)
|
|
Other comprehensive income for the
period, net of tax
|
(1.8)
|
|
(16.2)
|
|
Total comprehensive income for the period
|
24.1
|
|
14.9
|
|
Attributable to:
|
|
|
|
|
Equity holders of the
parent
|
24.1
|
|
14.9
|
Consolidated Balance Sheet
As at 31 December 2024
|
|
|
Notes
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Non-current assets
|
|
|
|
|
|
|
|
Goodwill
|
|
8
|
|
195.4
|
|
193.3
|
|
Other intangible assets
|
|
|
|
32.1
|
|
33.1
|
|
Investment in joint
venture
|
|
9
|
|
3.3
|
|
5.1
|
|
Property, plant and
equipment
|
|
10
|
|
292.1
|
|
284.7
|
|
Deferred tax assets
|
|
|
|
27.5
|
|
20.7
|
|
Retirement benefits
|
|
13
|
|
43.5
|
|
48.5
|
|
Trade and other
receivables
|
|
|
|
0.4
|
|
0.8
|
|
Total non-current
assets
|
|
|
|
594.3
|
|
586.2
|
|
Current assets
|
|
|
|
|
|
|
|
Inventories
|
|
|
|
236.0
|
|
207.5
|
|
Current tax receivables
|
|
|
|
2.8
|
|
2.3
|
|
Trade and other
receivables
|
|
|
|
137.2
|
|
141.7
|
|
Cash and bank balances
|
|
12c)
|
|
45.5
|
|
47.6
|
|
Total current assets
|
|
|
|
421.5
|
|
399.1
|
|
Total assets
|
|
|
|
1,015.8
|
|
985.3
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
|
|
196.9
|
|
188.4
|
|
Current tax liabilities
|
|
|
|
8.0
|
|
10.0
|
|
Lease liabilities
|
|
|
|
13.6
|
|
12.4
|
|
Bank overdrafts and
loans
|
|
12c)
|
|
75.0
|
|
1.8
|
|
Provisions
|
|
|
|
11.3
|
|
10.5
|
|
Contingent
consideration
|
|
|
|
13.0
|
|
10.5
|
|
Total current
liabilities
|
|
|
|
317.8
|
|
233.6
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Bank and other loans
|
|
12c)
|
|
123.9
|
|
177.8
|
|
Retirement benefits
|
|
13
|
|
6.8
|
|
8.0
|
|
Deferred tax
liabilities
|
|
|
|
8.2
|
|
7.0
|
|
Lease liabilities
|
|
|
|
62.6
|
|
59.4
|
|
Provisions
|
|
|
|
14.6
|
|
15.0
|
|
Contingent
consideration
|
|
|
|
3.5
|
|
18.5
|
|
Others
|
|
|
|
8.5
|
|
8.9
|
|
Total non-current
liabilities
|
|
|
|
228.1
|
|
294.6
|
|
Total liabilities
|
|
|
|
545.9
|
|
528.2
|
|
Net assets
|
|
|
|
469.9
|
|
457.1
|
|
Equity
|
|
|
|
|
|
|
|
Issued share capital
|
|
11
|
|
41.9
|
|
41.9
|
|
Share premium account
|
|
|
|
14.8
|
|
14.8
|
|
Equity reserve
|
|
|
|
7.8
|
|
7.9
|
|
Hedging and translation
reserve
|
|
|
|
39.2
|
|
37.3
|
|
Retained earnings
|
|
|
|
376.7
|
|
368.0
|
|
Own shares
|
|
|
|
(10.5)
|
|
(12.8)
|
|
Equity attributable to equity
holders of the parent
|
|
|
|
469.9
|
|
457.1
|
|
Total equity
|
|
|
|
469.9
|
|
457.1
|
Condensed Consolidated Statement of Changes in
Equity
For the year ended 31 December
2024
|
|
All
equity is attributable to equity holders of the parent
|
|
|
Issued
share
capital
|
Share
premium
account
|
Equity
reserve
|
Hedging
reserve
|
Trans
-lation
reserve
|
Retained
earnings
|
Own
shares
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Balance at 1 January 2023
|
41.9
|
14.8
|
6.4
|
(38.8)
|
90.3
|
346.5
|
(11.7)
|
449.4
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
31.1
|
-
|
31.1
|
|
Gains on foreign exchange
contracts- cash flow hedges
|
-
|
-
|
-
|
3.6
|
-
|
-
|
-
|
3.6
|
|
Exchange differences on translation
of overseas operations
|
-
|
-
|
-
|
-
|
(16.9)
|
-
|
-
|
(16.9)
|
|
Actuarial losses on defined benefit
pension schemes
|
-
|
-
|
-
|
-
|
-
|
(2.6)
|
-
|
(2.6)
|
|
Tax relating to components of other
comprehensive income
|
-
|
-
|
-
|
(0.9)
|
-
|
0.6
|
-
|
(0.3)
|
|
Total comprehensive income/(expense) for the
period
|
-
|
-
|
-
|
2.7
|
(16.9)
|
29.1
|
-
|
14.9
|
|
Share-based payment
charge
|
-
|
-
|
4.1
|
-
|
-
|
-
|
-
|
4.1
|
|
Tax relating to share-based
payments
|
-
|
-
|
-
|
-
|
-
|
0.9
|
-
|
0.9
|
|
Purchase of shares held by employee
benefit trust
|
-
|
-
|
-
|
-
|
-
|
-
|
(5.6)
|
(5.6)
|
|
Use of shares held by employee
benefit trust
|
-
|
-
|
-
|
-
|
-
|
(4.5)
|
4.5
|
-
|
|
Transfer to retained
earnings
|
-
|
-
|
(2.6)
|
-
|
-
|
2.6
|
-
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(6.6)
|
-
|
(6.6)
|
|
Balance at 31 December 2023
|
41.9
|
14.8
|
7.9
|
(36.1)
|
73.4
|
368.0
|
(12.8)
|
457.1
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
25.9
|
-
|
25.9
|
|
Gain on foreign exchange contracts-
cash flow hedges
|
-
|
-
|
-
|
(2.9)
|
-
|
-
|
-
|
(2.9)
|
|
Exchange differences on translation
of overseas operations
|
-
|
-
|
-
|
-
|
4.0
|
-
|
-
|
4.0
|
|
Actuarial losses on defined benefit
pension schemes
|
-
|
-
|
-
|
-
|
-
|
(4.8)
|
-
|
(4.8)
|
|
Tax relating to components of other
comprehensive income
|
-
|
-
|
-
|
0.8
|
-
|
1.1
|
-
|
1.9
|
|
Total comprehensive (expense)/income for the
period
|
-
|
-
|
-
|
(2.1)
|
4.0
|
22.2
|
-
|
24.1
|
|
Share-based payment
charge
|
-
|
-
|
4.5
|
-
|
-
|
-
|
-
|
4.5
|
|
Tax relating to share-based
payments
|
-
|
-
|
-
|
-
|
-
|
(0.8)
|
-
|
(0.8)
|
|
Purchase of shares held by employee
benefit trust net of repayments
|
-
|
-
|
-
|
-
|
-
|
2.1
|
(7.0)
|
(4.9)
|
|
Use of shares held by employee
benefit trust
|
-
|
-
|
-
|
-
|
-
|
(9.3)
|
9.3
|
-
|
|
Transfer to retained
earnings
|
-
|
-
|
(4.6)
|
-
|
-
|
4.6
|
-
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(10.1)
|
-
|
(10.1)
|
|
Balance at 31 December 2024
|
41.9
|
14.8
|
7.8
|
(38.2)
|
77.4
|
376.7
|
(10.5)
|
469.9
|
Consolidated Cash Flow Statement
For the year ended 31 December
2024
|
|
|
Notes
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Net cash from operating activities
|
|
12a)
|
|
49.4
|
|
41.4
|
|
Investing activities
|
|
|
|
|
|
|
|
Interest received
|
|
|
|
6.6
|
|
4.3
|
|
Proceeds on disposal of property,
plant and equipment
|
|
|
|
0.1
|
|
0.7
|
|
Purchases of property, plant and
equipment
|
|
|
|
(41.5)
|
|
(33.7)
|
|
Purchases of intangible
assets
|
|
|
|
(1.7)
|
|
(2.2)
|
|
Dividend from joint
venture
|
|
|
|
3.0
|
|
-
|
|
Acquisition of Spencer
|
|
14
|
|
(10.7)
|
|
(23.9)
|
|
Net cash used in investing activities
|
|
|
|
(44.2)
|
|
(54.8)
|
|
Financing activities
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
(10.1)
|
|
(6.6)
|
|
New loans
|
|
|
|
152.2
|
|
136.2
|
|
Repayment of borrowings
|
|
|
|
(132.0)
|
|
(96.2)
|
|
Purchase of shares held by employee
benefit trust
|
|
|
|
(6.3)
|
|
(5.6)
|
|
Repayments from employee benefit
trust
|
|
|
|
1.4
|
|
-
|
|
Repayment of lease
liabilities
|
|
|
|
(10.0)
|
|
(10.2)
|
|
Net cash (used)/generated in financing
activities
|
|
|
|
(4.8)
|
|
17.6
|
|
Net increase in cash and cash equivalents
|
|
|
|
0.4
|
|
4.2
|
|
Cash and cash equivalents at beginning of
period
|
|
|
|
45.8
|
|
42.7
|
|
Effect of foreign exchange rate
changes
|
|
|
|
(0.7)
|
|
(1.1)
|
|
Cash and cash equivalents at end of period
|
|
12c)
|
|
45.5
|
|
45.8
|
Notes to the above Financial Statements
For the year ended 31 December
2024
1.
General information
These results for the year ended 31
December 2024 are an excerpt from the Annual Report & Accounts
2024 and do not constitute the Group's statutory accounts for 2024
or 2023. Statutory accounts for 2023 have been delivered to
the Registrar of Companies, and those for 2024 will be delivered
following the Company's Annual General Meeting. The Auditor
has reported on both those accounts; their reports were
unqualified, did not draw attention to any matters by way of
emphasis and did not contain statements under Sections 498(2) or
(3) of the Companies Act 2006 or equivalent preceding
legislation.
2.
Significant accounting policies
Whilst the financial information
included in this Annual Results Release has been prepared in
accordance with UK-adopted international accounting standards, this
announcement does not itself contain sufficient information to
comply with UK-adopted international accounting standards.
Full Financial Statements that comply with UK-adopted international
accounting standards are included in the Annual Report &
Accounts 2024 which is available online at www.seniorplc.com.
Printed copies will be distributed on or soon after 14 March
2025.
At the date of authorisation of the
Group's Financial Statements, there are no relevant and material
new standards, amendments to standards or interpretations which are
effective for the year ended 31 December 2024.
3.
Segmental information
The Group reports its segment
information as two operating divisions according to the market
segments they serve, Aerospace and Flexonics, which is consistent
with the oversight employed by the Executive Committee. The
chief operating decision maker, as defined by IFRS 8, is the
Executive Committee. The Group is managed on the same basis,
as two operating divisions.
Business Segments
Segment information for revenue and
operating profit and a reconciliation to the Group profit after tax
is presented below:
|
|
Aerospace
|
Flexonics
|
Eliminations
/ central
costs
|
Total
|
Aerospace
|
Flexonics
|
Eliminations
/ central
costs
|
Total
|
|
|
Year
ended
2024
|
Year
ended
2024
|
Year
ended
2024
|
Year
ended
2024
|
Year
ended
2023
|
Year
ended
2023
|
Year
ended
2023
|
Year
ended
2023
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
External revenue
|
659.7
|
317.4
|
-
|
977.1
|
615.7
|
347.8
|
-
|
963.5
|
|
Inter-segment revenue
|
1.1
|
0.3
|
(1.4)
|
-
|
0.8
|
0.2
|
(1.0)
|
-
|
|
Total revenue
|
660.8
|
317.7
|
(1.4)
|
977.1
|
616.5
|
348.0
|
(1.0)
|
963.5
|
|
Adjusted trading profit
|
30.4
|
35.1
|
(20.3)
|
45.2
|
27.0
|
37.5
|
(19.7)
|
44.8
|
|
Share of joint venture
profit
|
-
|
1.3
|
-
|
1.3
|
-
|
1.0
|
-
|
1.0
|
|
Adjusted operating profit (note
4)
|
30.4
|
36.4
|
(20.3)
|
46.5
|
27.0
|
38.5
|
(19.7)
|
45.8
|
|
Amortisation of intangible assets
from acquisitions
|
(1.6)
|
-
|
-
|
(1.6)
|
(2.2)
|
-
|
-
|
(2.2)
|
|
Site relocation costs
|
(3.0)
|
(0.5)
|
-
|
(3.5)
|
-
|
(0.1)
|
-
|
(0.1)
|
|
US class action lawsuit
|
(1.1)
|
-
|
-
|
(1.1)
|
-
|
-
|
-
|
-
|
|
Net restructuring costs (note
4)
|
-
|
-
|
-
|
-
|
(3.6)
|
(2.0)
|
-
|
(5.6)
|
|
Operating profit
|
24.7
|
35.9
|
(20.3)
|
40.3
|
21.2
|
36.4
|
(19.7)
|
37.9
|
|
Finance income
|
|
|
|
10.6
|
|
|
|
10.1
|
|
Finance costs
|
|
|
|
(21.9)
|
|
|
|
(20.5)
|
|
Corporate undertakings
|
|
|
|
(1.2)
|
|
|
|
(4.7)
|
|
Profit before tax
|
|
|
|
27.8
|
|
|
|
22.8
|
|
Tax (Note 5)
|
|
|
|
(1.9)
|
|
|
|
8.3
|
|
Profit after tax
|
|
|
|
25.9
|
|
|
|
31.1
|
Trading profit and adjusted trading
profit is operating profit and adjusted operating profit
respectively before share of joint venture profit. See Note 4
for the derivation of adjusted operating profit.
Segment information for assets and
liabilities is presented below.
|
Assets
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Aerospace
|
679.6
|
|
646.5
|
|
Flexonics
|
213.0
|
|
215.4
|
|
Segment assets for reportable
segments
|
892.6
|
|
861.9
|
|
Unallocated
|
|
|
|
|
Central
|
3.7
|
|
4.0
|
|
Cash
|
45.5
|
|
47.6
|
|
Deferred and current tax
|
30.3
|
|
23.0
|
|
Retirement benefits
|
43.5
|
|
48.5
|
|
Others
|
0.2
|
|
0.3
|
|
Total assets per Consolidated
Balance Sheet
|
1,015.8
|
|
985.3
|
|
Liabilities
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Aerospace
|
202.8
|
|
183.1
|
|
Flexonics
|
77.7
|
|
79.9
|
|
Segment liabilities for reportable
segments
|
280.5
|
|
263.0
|
|
Unallocated
|
|
|
|
|
Central
|
17.3
|
|
22.2
|
|
Loans and Overdrafts
|
198.9
|
|
179.6
|
|
Deferred and current tax
|
16.2
|
|
17.0
|
|
Retirement benefits
|
6.8
|
|
8.0
|
|
Contingent consideration
|
16.5
|
|
29.0
|
|
Others
|
9.7
|
|
9.4
|
|
Total liabilities per Consolidated
Balance Sheet
|
545.9
|
|
528.2
|
Total revenue is disaggregated by
market sectors as follows:
|
|
Year
ended
2024
|
|
Year
ended
2023
|
|
|
£m
|
|
£m
|
|
Civil Aerospace
|
447.7
|
|
410.5
|
|
Defence
|
130.6
|
|
132.6
|
|
Other
|
82.5
|
|
73.4
|
|
Aerospace
|
660.8
|
|
616.5
|
|
|
|
|
|
|
Land Vehicles
|
187.6
|
|
201.7
|
|
Power & Energy
|
130.1
|
|
146.3
|
|
Flexonics
|
317.7
|
|
348.0
|
|
|
|
|
|
|
Eliminations
|
(1.4)
|
|
(1.0)
|
|
Total revenue
|
977.1
|
|
963.5
|
Other Aerospace comprises space and
non-military helicopters and other markets, principally including
semiconductor, medical, and industrial applications.
4.
Adjusted operating profit and adjusted profit before
tax
The presentation of adjusted
operating profit and adjusted profit before tax measures, derived
in accordance with the table below, has been included to identify
the performance of the Group prior to the impact of amortisation of
intangible assets from acquisitions, net restructuring costs, site
relocation costs, US class action lawsuit and costs associated with
corporate undertakings. The Board has a policy, which was
clarified in 2023, to separately disclose items it considers are
outside the normal course of management oversight and control on a
day-to-day basis and are not reflective of in-year trading
performance. Indicative criteria such as period to which the
item relates and external driven factors that are outside of the
control of the Group in combination with the magnitude and
consistency of application are also considered.
The amortisation charge relates to
the acquisition of Spencer Aerospace. It is charged on a
straight-line basis and reflects a non-cash item for the reported
year. Site relocation costs relate to transfer of business
activities into new or existing cost competitive facilities to
support the Group's strategic initiatives. The US class
action lawsuit relates to an historic legal matter. The Group
implemented a restructuring programme in 2019, which had residual
activity in 2023 in response to further specific end market
conditions. Corporate undertakings relate to business
acquisition and disposal activities. None of these charges
are reflective of in-year performance. Therefore, they are
excluded by the Board and Executive Committee when measuring the
operating performance of the businesses.
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Operating profit
|
40.3
|
|
37.9
|
|
Amortisation of intangible assets
from acquisitions
|
1.6
|
|
2.2
|
|
Site relocation costs
|
3.5
|
|
0.1
|
|
US class action lawsuit
|
1.1
|
|
-
|
|
Net restructuring costs
|
-
|
|
5.6
|
|
Adjusted operating
profit
|
46.5
|
|
45.8
|
|
|
|
|
|
|
Profit before tax
rofit before tax
|
27.8
|
|
22.8
|
|
Adjustments to profit before tax as
above
|
6.2
|
|
7.9
|
|
Corporate undertakings
|
1.2
|
|
4.7
|
|
Corporate undertakings - change in
fair value on acquisition consideration
|
(2.2)
|
|
2.9
|
|
Total Corporate
undertakings
|
(1.0)
|
|
7.6
|
|
Adjusted profit before
tax
|
33.0
|
|
38.3
|
Site relocation costs
In 2024, £3.5m of site relocation
costs were incurred (2023 - £0.1m) of which £0.5m (2023 - £0.1m)
related to the transfer of our Senior Flexonics Crumlin business to
a nearby high-tech facility in Wales to better showcase its design,
development, test and qualification capabilities in support of the
Group's strategic initiatives. The Group also recognised an
impairment of £1.9m of property, plant and equipment and costs of
£1.1m related to the transfer of existing business to other cost
competitive facilities.
US
class action lawsuit
In June 2022 a wage and hour class
action lawsuit was filed against one business based in California,
USA. This lawsuit alleged violations of state regulations
concerning meal and rest breaks and related penalties covering the
period 2021 through the first half of 2024. Mediation took
place in April 2024, resulting in a Company agreed settlement and
related costs of £1.1m, of which no payments have been made as at
31 December 2024. Court approval and payment is expected by
the end of the first half of 2025.
Net restructuring costs
In 2024 no restructuring costs were
incurred in the Consolidated Income Statement. In 2023, £5.6m
was incurred, of which £2.4m related to consultancy and other
costs, £2.0m related to inventory impairment where customer demand
had decreased and £1.2m related to impairment of property, plant
and equipment to cover the risk where there were no alternative
uses.
Net restructuring cash outflow was
£0.5m (2023 - £2.1m).
Corporate undertakings
Net income associated with
corporate undertakings was £1.0m (2023 - £7.6m costs), of which
£0.8m acquisition costs (2023 - £1.5m) and £2.2m income from fair
value changes in contingent consideration (2023 - £2.9m costs)
related to the acquisition of Spencer Aerospace in November 2022
and £0.4m costs are associated with potential disposal and other
corporate activities (2023 - £3.2m). See Note 14 for further
details on the financial impact of the acquisition in
2024.
5.
Tax charge
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Current tax:
|
|
|
|
|
Current year
|
8.4
|
|
10.7
|
|
Adjustments in respect of prior
periods- Americas uncertain tax positions
|
-
|
|
(7.0)
|
|
Adjustments in respect of prior
periods- other
|
(2.6)
|
|
(4.3)
|
|
|
5.8
|
|
(0.6)
|
|
Deferred tax:
|
|
|
|
|
Current year
|
(5.0)
|
|
(5.8)
|
|
Adjustments in respect of prior
periods
|
1.1
|
|
(1.9)
|
|
|
(3.9)
|
|
(7.7)
|
|
Total tax
charge/(credit)
|
1.9
|
|
(8.3)
|
The adjusted tax rate for the year
was 10.0% charge (2023 - 11.0% credit), being a tax charge of £3.3m
(2023 - £4.2m credit) on adjusted profit before tax of £33.0m (2023
- £38.3m profit). The adjusted tax charge benefits from the recognition of a
deferred tax asset of £2.2m in respect of historical UK tax losses,
net uncertain tax provision releases in the year totalling £1.8m as
well as enhanced R&D expenditure deductions in the
US.
The UK tax rate of 25% has been
applied to the UK profits for the period (2023: 23.5%, being an
effective tax rate as a result of the change in the UK tax rate
from 19% to 25% with effect from 1 April 2023). Deferred tax
assets and liabilities are measured at the rates that are expected
to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted
or substantially enacted at the Balance Sheet date. Taxation for
other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
The OECD Pillar II Globe Rules
introduce a global minimum corporate tax rate, initially at 15%,
applicable to multinational enterprise (MNE) groups with global
revenue over €750m. All participating OECD members are
required to incorporate these rules into national legislation.
On 20th June 2023 the UK substantially enacted legislation to
apply Pillar Two Globe rules into UK law which will first apply to
the Group from 1 January 2024. The Group has provided £0.1m
in the current year in respect of this liability.
The reported tax rate was 6.8%
charge, being a tax charge of £1.9m on reported profit before tax
of £27.8m. This included £1.4m net tax credit on items
excluded from adjusted profit before tax. The 2023 reported
tax rate was 36.4% credit, being a tax credit of £8.3m on reported
profit before tax of £22.8m.
Cash tax paid was £7.4m (2023 -
£5.6m) and is stated net of refunds received in the UK of £1.2m
(2023 - £2.8m in the US) of R&D tax incentives and tax paid in
prior periods, arising from the offset of tax losses against
taxable profits of prior periods.
6.
Dividends
|
|
Year ended
2024
£m
|
Year
ended
2023
£m
|
|
Amounts recognised as distribution
to equity holders in the period:
|
|
|
|
Final dividend for the year ended
31 December 2023 of 1.70p per share
(2022 - 1.00p)
|
7.0
|
4.1
|
|
Interim dividend for the year
ending 31 December 2024 of 0.75p per share (2023 -
0.60p)
|
3.1
|
2.5
|
|
|
10.1
|
6.6
|
|
Proposed final dividend for the
year ended 31 December 2024 of 1.65p per share (2023 -
1.70p)
|
6.8
|
7.0
|
7.
Earnings per share
The calculation of the basic and
diluted earnings per share is based on the following
data:
|
|
Year ended
2024
million
|
Year
ended
2023
million
|
|
Number of shares
|
|
|
|
Weighted average number of ordinary
shares for the purposes of basic earnings per share
|
414.3
|
413.3
|
|
Effect of dilutive potential
ordinary shares:
|
|
|
|
Share options
|
9.2
|
11.7
|
|
Weighted average number of ordinary
shares for the purposes of diluted earnings per share
|
423.5
|
425.0
|
|
|
Year ended
2024
|
Year
ended 2023
|
|
Earnings and earnings per
share
|
Earnings
£m
|
EPS
pence
|
Earnings
£m
|
EPS
pence
|
|
Profit for the period
|
25.9
|
6.25
|
31.1
|
7.52
|
|
Adjust:
|
|
|
|
|
|
Amortisation of intangible assets
from acquisitions net of tax credit of £0.4m (2023 - £0.6m
credit)
|
1.2
|
0.29
|
1.6
|
0.39
|
|
Site relocation costs net of tax
credit of £1.0m (2023 - £0.1m credit)
|
2.5
|
0.60
|
-
|
-
|
|
US class action lawsuit net of tax
credit of £0.3m (2023 - £nil)
|
0.8
|
0.20
|
-
|
-
|
|
Net restructuring costs net of tax
of £nil (2023 - £1.5m credit)
|
-
|
-
|
4.1
|
0.99
|
|
Corporate undertakings net of tax
charge of £0.3m (2023 - £1.9m credit)
|
(0.7)
|
(0.17)
|
5.7
|
1.38
|
|
Adjusted earnings after
tax
|
29.7
|
7.17
|
42.5
|
10.28
|
|
Earnings per share
|
|
|
|
|
|
- basic
|
|
6.25p
|
|
7.52p
|
|
- diluted
|
|
6.12p
|
|
7.32p
|
|
- adjusted
|
|
7.17p
|
|
10.28p
|
|
- adjusted and diluted
|
|
7.01p
|
|
10.00p
|
The denominators used for all
basic, diluted and adjusted earnings per share are as detailed in
the table above.
The presentation of adjusted earnings
per share, derived in accordance with the table above, has been
included to identify the performance of the Group prior to the
impact of amortisation of intangible assets from acquisitions, site
relocation costs, US class action lawsuit, net restructuring costs
and costs associated with corporate undertakings. The Board
has a policy, which was clarified in 2023, to separately disclose
items it considers are outside the normal course of management
oversight and control on a day-to-day basis and are not reflective
of in-year trading performance. Indicative criteria such as
period to which the item relates and external driven factors that
are outside of the control of the Group in combination with the
magnitude and consistency of application are also considered.
See Note 4 for further details.
8. Goodwill
Goodwill increased by £2.1m during
the year to £195.4m (2023 - £193.3m) due to net foreign exchange
differences.
9.
Investment in joint venture
The Group has a 49% interest in
Senior Flexonics Technologies (Wuhan) Limited, a jointly controlled
entity incorporated in China which was set up in 2012. The
Group's investment of £3.3m represents the Group's share of the
joint venture's net assets as at 31 December 2024 (2023 -
£5.1m). The movement of £1.8m in the Group's investment
during the year comprises of £1.3m Group's Share of profit more
than offset by £3.0m dividend received and £0.1m exchange
difference.
10. Property, plant and equipment
During the period, the Group spent
£41.5m (2023 - £33.7m) on the acquisition
of property, plant and equipment. The Group also disposed of
property, plant and equipment with a carrying value of £0.1m (2023
- £0.5m) for proceeds of £0.1m (2023 - £0.7m). At 31 December
2024, right-of-use assets were £65.5m (2023 - £64.4m).
11. Share capital
Share capital as at 31 December
2024 amounted to £41.9m. No shares were issued during 2023
and 2024.
12. Notes to the Cash Flow Statement
a) Reconciliation of operating
profit to net cash from operating activities
|
|
Year ended
2024
£m
|
|
Year
ended
2023
£m
|
|
Operating profit
|
40.3
|
|
37.9
|
|
Adjustments for:
|
|
|
|
|
Depreciation of property, plant and
equipment
|
47.3
|
|
48.0
|
|
Amortisation of intangible
assets
|
3.3
|
|
3.7
|
|
Profit on sale of fixed
assets
|
-
|
|
(0.2)
|
|
Share-based payment
charges
|
4.5
|
|
4.1
|
|
Pension contributions
|
(0.8)
|
|
(1.4)
|
|
Pension service and running
costs
|
1.9
|
|
1.3
|
|
Corporate undertaking
costs
|
(2.3)
|
|
(1.9)
|
|
Share of joint venture
|
(1.3)
|
|
(1.0)
|
|
Increase in inventories
|
(26.6)
|
|
(21.7)
|
|
Decrease/(increase) in
receivables
|
4.0
|
|
(20.4)
|
|
Increase in payables and
provisions
|
5.1
|
|
16.8
|
|
Restructuring impairment of
property, plant and equipment and software
|
-
|
|
1.2
|
|
US pension settlement
|
-
|
|
(0.9)
|
|
US class action lawsuit
|
1.1
|
|
-
|
|
Site relocation costs
|
1.9
|
|
-
|
|
Working capital and provisions
currency movements
|
(0.4)
|
|
(1.3)
|
|
Cash generated by
operations
|
78.0
|
|
64.2
|
|
Income taxes paid
|
(7.4)
|
|
(5.6)
|
|
Interest paid
|
(21.2)
|
|
(17.2)
|
|
Net cash from operating
activities
|
49.4
|
|
41.4
|
b) Free cash flow
Free cash flow, a non-statutory
item, enhances the reporting of the cash-generating ability of the
Group prior to corporate activity such as acquisitions,
restructuring, disposal activities, financing and transactions with
shareholders. It is used as a performance measure by the
Board and Executive Committee and is derived as follows:
|
|
Year ended
2024
|
|
Year
ended
2023
|
|
|
£m
|
|
£m
|
|
Net cash from operating
activities
|
49.4
|
|
41.4
|
|
Corporate undertaking
costs
|
2.3
|
|
1.9
|
|
Net Restructuring cash
paid
|
0.5
|
|
2.1
|
|
Site relocation costs
|
1.6
|
|
0.1
|
|
US pension settlement cash
paid
|
-
|
|
0.9
|
|
Interest received
|
6.6
|
|
4.3
|
|
Proceeds on disposal of property,
plant and equipment
|
0.1
|
|
0.7
|
|
Purchases of property, plant and
equipment
|
(41.5)
|
|
(33.7)
|
|
Purchase of intangible
assets
|
(1.7)
|
|
(2.2)
|
|
Free cash flow
|
17.3
|
|
15.5
|
c) Analysis of net debt
|
|
At
1 January
2024
|
Net
Cash
flow
|
Non
Cash
|
Exchange
movement
|
Other
Lease
movements
|
At 31
December
2024
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Cash and bank balances
|
47.6
|
(1.4)
|
-
|
(0.7)
|
-
|
45.5
|
|
Overdrafts
|
(1.8)
|
1.8
|
-
|
-
|
-
|
-
|
|
Cash and cash
equivalents
|
45.8
|
0.4
|
-
|
(0.7)
|
-
|
45.5
|
|
Debt due within one year
|
-
|
-
|
(75.0)
|
-
|
-
|
(75.0)
|
|
Debt due after one year
|
(177.8)
|
(20.2)
|
75.0
|
(0.9)
|
-
|
(123.9)
|
|
Lease liabilities
(1)
|
(71.8)
|
10.0
|
-
|
(1.5)
|
(12.9)
|
(76.2)
|
|
Liabilities arising from financing
activities
|
(249.6)
|
(10.2)
|
-
|
(2.4)
|
(12.9)
|
(275.1)
|
|
Total
|
(203.8)
|
(9.8)
|
-
|
(3.1)
|
(12.9)
|
(229.6)
|
|
(1)
|
The change in lease liabilities in
the year ended 31 December 2024 includes lease rental payments of
£13.4m (£3.4m of these payments relates to lease interest), £1.5m
exchange movement and £12.9m other movements which are related to
lease additions and modifications.
|
|
|
Year ended
2024
|
Year
ended
2023
|
|
Cash and Cash equivalents
comprise:
|
£m
|
£m
|
|
Cash and bank balances
|
45.5
|
47.6
|
|
Overdrafts
|
-
|
(1.8)
|
|
Total
|
45.5
|
45.8
|
Cash and cash equivalents (which
are presented as a single class of assets on the face of the
Consolidated Balance Sheet) comprise cash at bank and other
short-term highly liquid investments with a maturity of three
months or less.
d) Analysis of working capital and
provisions
Working capital comprises the
following:
|
|
Year ended
2024
|
Year
ended
2023
|
|
|
£m
|
£m
|
|
Inventories
|
236.0
|
207.5
|
|
Trade and other
receivables
|
137.2
|
141.7
|
|
Trade and other payables
|
(196.9)
|
(188.4)
|
|
Working capital, including
derivatives
|
176.3
|
160.8
|
|
Items excluded:
|
|
|
|
Foreign exchange
contracts
|
2.7
|
0.1
|
|
Total
|
179.0
|
160.9
|
Working capital and provisions
movement, net of restructuring items, a non-statutory cash flow
item, is derived as follows:
|
|
Year ended
2024
|
Year
ended
2023
|
|
|
£m
|
£m
|
|
Increase in inventories
|
(26.6)
|
(21.7)
|
|
Decrease/(increase) in
receivables
|
4.0
|
(20.4)
|
|
Increase in payables and
provisions
|
5.1
|
16.8
|
|
Working capital and provisions
movement, excluding currency effects
|
(17.5)
|
(25.3)
|
|
Items excluded:
|
|
|
|
Increase in restructuring related
inventory impairment
|
-
|
(2.0)
|
|
Decrease/(increase) in net
restructuring provision and other receivables
|
0.5
|
(0.3)
|
|
Total
|
(17.0)
|
(27.6)
|
13. Retirement benefit schemes
At 31 December 2024, aggregate
retirement benefit liabilities of £6.8m (2023 - £8.0m) comprise the
Group's US defined benefit pension funded schemes with a total
deficit of £1.4m (2023 - £2.8m) and other unfunded schemes, with a
deficit of £5.4m (2023 - £5.2m). The retirement benefit
surplus of £43.5m (2023 - £48.5m) comprises the Group's UK defined
benefit pension funded scheme.
The liability and asset values of
the funded schemes have been assessed by independent actuaries
using current market values and discount rates.
14. Acquisition and other corporate
activities
Acquisition of Spencer Aerospace Manufacturing,
LLC.
On 25 November 2022, the Group
acquired substantially all of the assets of Spencer Aerospace
Manufacturing, LLC, a leading manufacturer of highly engineered,
high-pressure hydraulic fluid fittings for use in commercial and
military aerospace applications, located in Valencia, California,
USA.
At 31 December 2024, there is a
maximum contingent consideration remaining of $26.6m (£21.2m)
potentially payable, in milestone amounts, dependent on the
financial performance of Spencer Aerospace for the period from 1
January 2024 to 31 December 2026. The most likely range of
this remaining contingent element is estimated between $21.6m and
$26.6m. The fair value of $20.6m (£16.5m), which includes
discounting, has been recognised at 31 December 2024. The
fair value of contingent consideration assumes continuing to expand
the relationship with Spencer's established customers and
leveraging Senior's strong relationships with OEMs, Tier 1
integrators and after market customers around the world to exploit
opportunities for Spencer Aerospace. In 2024, the fair value
change relates to a release of £3.6m for the 2025 earnout target
not expected to be payable as a result of the impact of the well
publicised 737 MAX subdued volumes, partly offset by £1.4m interest
unwind (2023 - £2.9m interest unwind). In 2023, $26.6m
(£23.9m) deferred consideration net of working capital adjustment
was paid. In 2024, £0.8m costs (2023 - £1.5m) were incurred
related to the acquisition.
The movement of deferred and
contingent consideration payable and working capital receivable
since acquisition date is shown below:
|
|
Year ended
2024
£m
|
Year
ended
2023
£m
|
|
Balance at 1 January
|
29.0
|
52.0
|
|
Cash paid net of working capital
adjustment
|
(10.7)
|
(23.9)
|
|
Change in fair value on acquisition
consideration
|
(2.2)
|
2.9
|
|
Effects of movements in exchange
rates
|
0.4
|
(2.0)
|
|
Balance at 31 December
|
16.5
|
29.0
|
|
|
|
|
|
Amounts falling due within one
year
|
13.0
|
10.5
|
|
Amounts falling due after one
year
|
3.5
|
18.5
|
|
Contingent consideration balance at
31 December
|
16.5
|
29.0
|
Also in 2024, £0.4m costs
associated with potential disposal and other corporate activities
were incurred (2023 - £3.2m).
15. Provisions
Provisions include warranty costs
of £19.2m (2023 - £17.9m), restructuring of £nil (2023 - £0.5m),
and other provisions including contractual matters, claims and
legal costs that arise in the ordinary course of business of £6.7m
(2023 - £7.1m). The warranty costs include a provision of
£11.8m (2023 - £11.0m) related to one specific disputed commercial
matter. The range of reasonably possible outcomes considered
by the Board is £6m, which reflects a reasonably possible increase
of £4m or decrease of £2m. No further details on the matter
are disclosed to avoid prejudicing the contractual
position.
16. Contingent liabilities
The Group is subject to various
claims which arise from time to time in the course of its business
including, for example, in relation to commercial matters, product
quality or liability, and tax audits. Where the Board has
assessed there to be a more likely than not outflow of economic
benefits, provision has been made for the best estimate as at 31
December 2024 (see Note 15). For all other matters, the Board
has concluded that it is not more likely than not that there will
be an economic outflow of benefits. While the outcome of some
of these matters cannot be predicted with any certainty, the
Directors do not expect any of these arrangements, legal actions or
claims, after allowing for provisions already made where
appropriate, to result in significant loss to the Group.
17. Related party transaction
Barbara Jeremiah, Senior
Independent Non-Executive Director and Chair of the Remuneration
Committee was appointed a non-executive director of Johnson Matthey
Plc with effect from 1 July 2023. Johnson Matthey Plc, a
related party of the Group, has been renting excess car parking
space from one of the Group's operating businesses on a rolling
monthly basis. The lease contract was in place prior to the
acquisition of Thermal Engineering in 2013 by the Group. In
2024, £0.07m car park rental was received (2023: £0.06m).
There are no outstanding amounts at 31 December 2024 (31 December
2023: £nil).
The Group has also related party
relationships with a number of pension schemes and with Directors
and Senior Managers of the Group.
