Acquisition and Trading Update

RNS Number : 8390S

Senior PLC

28 November 2011

 



Senior plc - Aerospace acquisition and trading update

Aerospace acquisition

Senior plc ("Senior") is pleased to announce that it has acquired 100% of the issued share capital of Weston EU Limited and its subsidiary Weston SEA Limited (collectively "Weston" or the "Weston Group") from the company's family shareholders.

Weston, located in Colne, Lancashire (UK) and with facilities in Chonburi in Thailand, is principally a manufacturer of precision machined parts and assemblies for the commercial aerospace industry.  The facilities in Thailand are well situated, within one hour's drive of Bangkok and close to the main port of Sriracha, and were unaffected by the recent floods.

Weston specialises in the machining and assembly of aerofoils, aluminium and hard metal structural parts and premium aircraft-seat structures.  Its largest customers are Rolls-Royce, Spirit Aerosystems (Europe) and Contour Aerospace.  Weston has content on each of the Airbus A320 family, A330, A350 and A380 platforms, either on the engines or the aircraft structure itself.  More than 70% of Weston's revenue for the first ten months of 2011 was derived either directly or indirectly from Airbus commercial aircraft platforms.  Over the past year, Airbus has announced build-rate increases for all of these aircraft types and, consequently, the future prospects for Weston appear highly encouraging.

The total consideration for the purchase of Weston was £54.0m, plus reimbursement of the cash in the Weston business at acquisition.  The purchase consideration was paid in cash at completion, with a small potential adjustment to be made after completion dependent upon the level of working capital in the business at the date of acquisition.  The transaction was funded through the utilisation of existing cash and debt facilities.

For the year to 31 December 2010, the Weston Group reported sales of £42.5m and profit before interest, tax and depreciation of £4.2m.  The unaudited management accounts of the business for the ten months to the end of October 2011 show sales of £45.4m and profit before interest, tax and depreciation of £5.0m.  Gross assets of the business are approximately £23.5m.  The existing management team will continue to manage the business which will operate within Senior's Aerospace Structures Division.  The acquisition is expected to be immediately earnings enhancing.

Commenting on the acquisition, Mark Rollins, Senior Group Chief Executive, said:

"I am very pleased to announce the acquisition of Weston and to welcome all of its employees to the Senior Group.  Weston represents an excellent strategic addition to Senior's Aerospace Structures Division, with Weston's European and Asian locations, and predominantly Airbus exposure, providing an excellent complementary fit with the Structures Division's existing North American, and largely Boeing, footprint.

Weston has a well established reputation in the aerospace industry and its capabilities, combined with Senior's wider market access and financial strength, and the current healthy commercial aerospace markets, are expected to further enhance the future growth prospects for the Senior Group."

Trading update

Trading conditions in the period since the Interim Management Statement issued on 25 October have remained healthy and in line with the Board's expectations.  Accordingly, the Board continues to expect that 2011 adjusted profit before tax⁽¹⁾ will be in line with its previous expectations and, assuming anticipated market conditions prevail, believes the Group remains well positioned for further progress in 2012 and beyond.

Given the proximity to the year end, the Board does not intend to issue any further trading update ahead of its planned full year results announcement on Monday 27 February 2012.

Note:
(1)	Adjusted profit before tax is before loss/profit on sale of fixed assets, acquisition costs and amortisation of intangible assets arising on acquisitions.

Further information

Mark Rollins	Group Chief Executive, Senior plc	[phone]
Simon Nicholls	Group Finance Director, Senior plc	[phone]
Philip Walters	RLM Finsbury Group	[phone]

About Senior

Senior is an international manufacturing group with operations in 12 countries.  It is listed on the main market of the London Stock Exchange (symbol SNR).  Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land vehicle and energy markets.  Further information on Senior plc, may be found at: www.seniorplc.com

Cautionary Statement

This announcement 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 the announcement, and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.

 

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