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Annual Results

Senior's FY profit falls, cost-cutting begins

27 February 2017 07:29

Senior Plc's FY pretax profit has fallen in what it describes as a challenging year that has sparked the streamlining of parts of the business and a cost-reduction programme.

Pretax profit was £55.5m, from £63.8m. Revenue was £917.0m, from £849.5m. Total dividend was hiked by 6% to 6.57p a share.

CEO David Squires said 2016 was a challenging year with revenue growth in Aerospace offset by market-led reductions in Flexonics.

"Despite these challenges Senior delivered strong free cash flow of £48.5m," said Squires in a statement.

"In response to end-market conditions and business opportunities in both divisions, we are streamlining parts of the Group and have implemented a further cost savings programme," he added.

In Aerospace, the company expected further revenue growth in 2017, however, after allowing for costs of streamlining actions, it anticipated overall performance to be broadly in line with 2016.

In Flexonics, whilst Senior Plc anticipated that late 2017 should be an inflexion point as truck and off-highway markets recovered in 2018 and investment in industrial projects increases, current trends suggest Flexonics performance to be marginally lower in 2017 compared to 2016.

Squires continued: "Looking further ahead, Senior expects to make progress from 2018 onwards as new programmes and products enter production and margins recover as the benefits of the operational improvement initiatives and cost saving actions are delivered."

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