Final Results -6-
February 27 2012 - 2:01AM
UK Regulatory
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* Further develop strategic customer relationships * Strengthening of key customer relationships in both
large commercial and regional/business jet sectors
* Increase customer value-add through more complete
product offering, including increased collaboration * New business being secured as a result of intra-Group
between operations cooperation (e.g. on Joint Strike Fighter)
* Market share growth through increased content on new * Developing opportunities in engineered products,
platforms (e.g. A320neo, B737 MAX, KC390, A350) particularly in area of engine build up on A320neo
and B737 MAX, potentially positions Group well for
increased market share on a number of key future
* Seek proprietary acquisitions and expand engineered generation platforms
product portfolio
* Focus on proprietary acquisitions increasing
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Gas turbine engines
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* Target higher value-add engineered or flight-critical * Weston acquisition brings Senior's first major
parts (e.g. rotating) exposure to critical rotating gas turbine engine
parts (i.e. airfoil blades)
* Increase focus on fluid systems applications (e.g.
engine ducting and bellows) * Secured first content on A320neo engine ducting and
working on other opportunities for a number of OEM
gas turbine engine manufacturers
* Continue to develop customer outsourcing
opportunities and strengthen multi-site customer
relationships * Acquisition of Weston brings first manufacturing
capability in south-east Asia, with significant
capacity for growth
* Develop low-cost country footprint
* A number of Senior's businesses securing new
* Seek value-enhancing acquisitions contracts through collaboration and leverage of
existing customer relationships
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Land vehicles
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* Increase capability in heat exchanger technology, * Significant increase in exhaust gas recycler products
including fuel cells supplied in North America
* Continue to develop product portfolio in line with * New European and Brazilian truck programmes secured
increasing emission regulations and first shipments made in 2011
* Develop lower value-add component manufacture to * Increased activity in low-cost countries, notably
low-cost countries India and Czech Republic, on new passenger vehicle
programmes for Europe, the USA and domestic
consumption
* Increase emerging market footprint, concentrating on
markets that exhibit attractive growth
characteristics * Increased collaboration between North American and
European management teams on development of next
generation of heat exchanger products
* Continue to develop customer base in both on-road
truck and off-highway applications
* First heavy-duty diesel engine programmes secured for
manufacture in France
* Increased focus on engineered product
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Industrial process control
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* Capitalise on sector requirements to comply with * Improved collaboration between Group operations in
reduced emission standards the USA, Canada and Brazil leads to increased
contract wins
* Target wider global presence and establish offshore
partners for large projects * Delay in passing of emission legislation in the USA
dampens short-term performance, but Group remains
well positioned for growth once legislation is
* Seek proprietary adjacent products enacted
* Participate selectively in developments in key new * Increased sales of fuel cell components in the USA
technology applications (e.g. combined heat and power
concentrated solar power)
* Focus on additional proprietary adjacent products in
existing and emerging markets
* Additional concentrated solar power contracts awarded
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Acquisitions
The Group completed two acquisitions during the year, both
funded through the utilisation of existing cash and debt
facilities.
Damar Machine Company and two small related legal entities
(collectively "Damar") were acquired on 25 March 2011 for a total
consideration of GBP15.8m (including deferred consideration payable
of GBP0.3m) plus overdraft acquired of GBP0.1m. Damar is located in
Monroe, Washington, USA and is principally a manufacturer and
integrator of precision machined parts and assemblies for the
commercial aerospace industry. It specialises in air beams, wing
skins, stow-bin parts, interior decorative assemblies, panels and
bulk-head components, manufactured from aluminium, titanium and
other specialist metals. The business is highly complementary to
the Group's existing Aerospace structures operations located in
Washington State. Damar's principal end customer is Boeing and it
has content on each of Boeing's 737, 747, 767, 777 and 787
platforms. Boeing has announced build rate increases for all of
these aircraft types and, consequently, the future prospects for
Damar, within Senior's Aerospace portfolio, are encouraging.
The second acquisition, also in Senior's Aerospace Division, was
Weston EU Limited and its subsidiary Weston SEA Limited
(collectively "Weston") which was acquired on 25 November 2011.
Weston is located in Colne, Lancashire UK and Chonburi in Thailand.
The total consideration for the acquisition was GBP53.0m plus
reimbursement of cash in the Weston business at acquisition of
GBP4.1m. Weston has a well established reputation in the aerospace
industry, specialising 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 in 2011 was derived either directly or
indirectly from Airbus commercial aircraft platforms.
The Weston acquisition represents an excellent strategic
addition to Senior's Aerospace Division, with Weston's European and
Asian locations, and predominantly Airbus exposure, providing an
excellent complementary fit with the Group's existing North
American, and largely Boeing, footprint. Airbus has also announced
build rate increases for all of these aircraft types and,
consequently, the future prospects for Weston are healthy.
Financial details relating to the acquisitions are disclosed in
Note 13.
Financial Review
Summary
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