Final Results -5-
February 27 2012 - 2:01AM
UK Regulatory
14.55 pence resulted in a significant increase
(2010 - 12.01 pence) +21% in earnings per share. 1,2
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Return on revenue margin
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A record Group adjusted operating
margin of 13.8% was achieved in
2011, with both the Aerospace
and Flexonics Divisions posting
record figures, principally due
to a combination of increased
activity on major OEM programmes,
effective and sustained cost controls,
and operational efficiency gains
based on further progress with
the Group's ongoing Lean Manufacturing
13.8% +0.5 continuous improvement initiatives. 1,2,4
(2010 - 13.3%) PPTS
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Net cash from operating
activities
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The Group generated significant
cash from operating activities
in 2011 of GBP77.1m, driven by
strong earnings growth and effective
control over working capital.
This level of cash conversion
has enabled the Group to propose
a 22% dividend increase and fund
GBP77.1m increased capital expenditure
(2010 - GBP70.2m) +10% of 1.2 times depreciation. 1
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Return on capital employed
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The increase in the group's return
on capital employed in 2011 to
26.8% (a record level) was achieved
through a combination of the earnings
enhancements set out above and
increased balance sheet efficiency,
in particular effective allocation
of capital expenditure to increasingly
profitable programmes and control
over working capital requirements
26.8% +0.7 at an operational level. 1,2,3,4
(2010 - 26.1%) PPTS
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Carbon dioxide emissions
----------- ------------------------------------------- ---------
94 tonnes / GBPm revenue -3% Through more efficient use of 4
(2010 - 97 tonnes/GBPm resources and improved asset utilisation,
revenue) the Group has made good early
progress on its published five
year target of improving energy
efficiency by 10% between 2011
and 2015. This is the sixth consecutive
year that Senior has reduced its
environmental impact.
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Lost time injury frequency
rate
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The Group takes a proactive approach
to the health and safety of all
employees, as described more fully
Reduced in the Corporate Social Responsibility
by 0.62 Report in the Annual Report &
0.98 incidents per 100 incidents Accounts 2011. A reduction of
employees p.a. per 100 39% in the number of recordable
(2010 - 1.6 incidents employees injuries which incurred lost time
per 100 employees p.a.) p.a. was achieved in 2011. 4
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The Group has had considerable success in implementing its
strategy over the last five years. A summary of the five-year
average annual movements from 2006 to 2011 in the Group's KPIs is
set out in the table below:
Five-year average annual
movement - 2006 to 2011 (7)
Organic revenue growth (1) +5% p.a.
Adjusted earnings per share growth (2) +29% p.a.
Return on revenue margin increase (3) +1.4 ppts p.a.
Net cash from operating activities +24% p.a.
Return on capital employed increase (4) +2.6 ppts p.a.
CO(2) emissions / GBPm revenue (5) -4% p.a.
Lost time injury frequency rate (6) 0.4 fewer incidents p.a.
(1) Organic revenue growth is the rate of growth in Group revenue,
at constant exchange rates, excluding the effect of acquisitions
and disposals.
(2) Adjusted earnings per share is the profit after taxation (adjusted
for the profit or loss on disposal of fixed assets, amortisation
of intangible assets arising on acquisitions, acquisition costs,
goodwill impairment charge and exceptional pension gains) divided
by the average number of shares in issue in the period.
(3) Return on revenue margin is the Group's adjusted operating profit
divided by its revenue.
(4) Return on capital employed is the Group's adjusted operating
profit divided by the average of the capital employed at the
start and end of the period. Capital employed is total assets
less total liabilities, except for those of an interest-bearing
nature.
(5) CO(2) emissions / GBPm revenue is an estimate of the Group's
carbon dioxide emissions in tonnes divided by the Group's revenue
in GBPm.
(6) Lost time injury frequency rate is the number of OSHA (or equivalent)
recordable injury or illness cases involving days away from
work per 100 employees.
(7) Calculated as the simple average of year-on-year movements in
these KPIs over the five years, as published.
The application of the Group's four key principles in strategy
implementation outlined above has resulted in the development of
the following strategic objectives in each of the Group's five key
market sectors. The Group's progress against these objectives is
also included in the table below:
What is the strategy? Progress
Structures
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* Growth in higher value kitting and assemblies to * Weston acquisition brings increased exposure to
deliver market share gains Airbus, hard metal machining capabilities and
facilities in Europe and south-east Asia
* Develop hard metal machining capabilities
* New programme wins with key customers in Mexico
* Diversify customer base via increased collaboration
between operations * Improvements in operational execution is a key driver
of margin progression
* Invest in well-funded military programmes
* Increased market share on large commercial aircraft
platforms via acquisitions of Damar and Weston
* Continue focus on operational excellence to drive
customer value and market share
* Robust performance on key military programmes
* Selective acquisitions to complement growth strategy
* Prospect of continued growth via build rate increases
and new platforms coming through in medium-term
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Fluid conveyance systems
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