Senior PLC
11 January 2000
TRADING UPDATE
In accordance with the undertaking given to the market on 10 November, 1999,
the Board of Senior is issuing the following pre-closed period update on
trading for the year to December 1999.
Automotive
The US passenger car market provided record orders and sales for Senior
Flexonics Automotive Division in 1999 and early indications are that demand
continues to be strong in the first quarter of 2000. Demand is being boosted
by increasing deliveries of the new Senior Flexonics AIR tube to GM as the
product becomes specified across their model range in order to meet new
legislative requirements on emissions.
European demand remains flat although recent significant success with the
Group's first order for flexible exhaust connectors from PSA Citroen, for
delivery in 2001, underpins the Group's growing confidence in this more
fragmented and competitive market.
The rationalisation programme undertaken in the UK has now been completed
successfully, resulting in a lower cost base for 2000.
Aerospace
The North American commercial aircraft market continued its cyclical softening
throughout the second half of 1999. The trading effect of the resulting 'push
outs' was exacerbated by the temporary delays in an otherwise buoyant space
market. Current indications are that this trading climate will remain
unchanged until at least the second half of 2000, at which time supplies to
new regional and business jet programmes should commence. This, together with
the anticipated recovery in the space market should offer improved activity
levels. European business, where the downturn is significantly less,
continues to develop favourably.
The acquisition of Cork Industries has been well received by customers and is
now expected to provide returns ahead of initial expectations.
The investigation into Ketema's accounting irregularities has been completed,
with final results in line with those already advised in December 1999.
Specialised Industrial
As the market has already been informed, reduction in worldwide customer
demand and associated pricing pressures provided a very difficult climate in
1999 which resulted in lower sales and significantly lower level of
profitability, particularly in continental Europe.
Having virtually completed the rationalisation programme for Air Systems, the
division is now benefiting from its lower cost base and from improving
activity levels in the UK and Germany, thus providing opportunity for recovery
in 2000.
The acquisition of Pathway required significant assimilation into Senior
Flexonics' existing expansion joint activity and this process is expected to
be complete by the half year. Improving enquiry levels, arising from
increased oil prices, should support a recovery in demand for petrochemical
expansion joints which is now expected to begin in the second half of the
year.
Outlook
Trading conditions at the end of 1999 remained in line with the updated view
given to the market on 3 December, 1999 and the Board's profit expectations
for the current year therefore remain unchanged.
With significant reorganisations either already completed or nearing
completion, and with full year contributions from Pathway and Cork, the
prospects of a recovery in profitability during 2000 are encouraging.
Enquiries:
Senior plc
Andrew Parrish, Group Chief Executive
Terry Garthwaite, Group Finance Director 01923 775547
Finsbury
James Murgatroyd
Morgan Bone 0207 251 3801
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