Senior Plc (SNR), a British maker of airliner parts and car and truck components, is seeking to win additional business from Airbus and Boeing Co. (BA:US) as they look for more supplies to increase production.
The growth in output at Airbus and Boeing helped drive sales at Senior to 377.2 million pounds ($586 million) in the first six months, up 20 percent from a year earlier, the company said in a statement today. Senior, based in Rickmansworth, near London, reported a 22 percent increase in adjusted earnings per share to 8.57 pence.
“Boeing and Airbus are obviously increasing build rates and that is putting pressure on the supply chain,” Senior Chief Executive Officer Mark Rollins said today in a telephone interview. “That offers opportunity.”
Airbus and Boeing are raising output for single-aisle airliners and long-range aircraft. In some cases they have been working closely with small suppliers to ensure they can keep pace. Senior may increase market share as the aircraft makers outsource more work they have done in-house, as well as through opportunities on the Airbus A320neo and Boeing 737 MAX programs, new versions of the single-aisle aircraft, Rollins said.
Senior’s net debt fell to 74.8 million pounds at the end of June from 93 million pounds at the end of 2011. “That gives us some headroom if we wanted to buy some other business,” Rollins said. While the company is ready to spend as much as 100 million pounds “we are not going to stretch the balance sheet,” he said.
Senior has acquisition targets in mind, Rollins said, without disclosing their names. While it is unlikely, “there is a chance” a deal could be done this year, he said.
To strengthen its commercial aerospace activities, Senior acquired Colne, England-based Weston Group last year. The unit’s financial performance “was ahead of expectations” in the first half, the company said in its interim management statement.
Growth in coming years should benefit from increased production for other aircraft programs, such as Bombardier Inc. (BBD/B)’s CSeries narrow-body, the Russian Sukhoi Co. SuperJet 100 regional jet, and the Japanese Mitsubishi Aircraft Corp. regional jet, Rollins said.
Senior’s defense business may see “future weakness” because of spending cuts in the U.S. and Europe, but currently remains “relatively solid,” the company said in the statement.
Senior’s shares fell 3 percent to 179 pence at 10:25 a.m. in London.
While it is not looking to become focused 100 percent on any market segment, the company may divest one or two operations, Rollins said.
Senior’s north American truck business had “significantly increased revenue” in the first six months, which “more than offset” weaker passenger-vehicle sales at European clients.
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