TIDMSNR
RNS Number : 3827Q
Senior PLC
29 February 2016
Senior plc
Results for the year ended 31 December 2015
FINANCIAL HIGHLIGHTS Year ended 31 December % change % change
(constant
currency)
2015 2014
------------------------------------- ------------ ----------- ---------- -----------
REVENUE GBP849.5m GBP820.8m +4% 0%
------------------------------------- ------------ ----------- ---------- -----------
OPERATING PROFIT GBP72.3m GBP89.6m -19% -22%
ADJUSTED OPERATING PROFIT (1) GBP107.8m GBP111.6m -3% -7%
ADJUSTED OPERATING MARGIN (1) 12.7% 13.6% -0.9ppts -1.0ppts
------------------------------------- ------------ ----------- ---------- -----------
PROFIT BEFORE TAX GBP63.8m GBP80.6m -21% -23%
ADJUSTED PROFIT BEFORE TAX (1) GBP99.3m GBP102.6m -3% -6%
------------------------------------- ------------ ----------- ---------- -----------
BASIC EARNINGS PER SHARE 11.59p 15.25p -24%
ADJUSTED EARNINGS PER SHARE (1) 18.98p 19.84p -4%
------------------------------------- ------------ ----------- ----------
TOTAL DIVIDENDS (PAID AND PROPOSED)
PER SHARE 6.20p 5.63p +10%
------------------------------------- ------------ ----------- ----------
FREE CASH FLOW (2) GBP51.7m GBP57.8m -11%
------------------------------------- ------------ ----------- ----------
NET DEBT (2) GBP194.6m GBP105.0m GBP89.6m
increase
------------------------------------- ------------ ----------- ----------
Headlines
- A solid set of results given the challenging conditions in some
of our end markets
- Adjusted profit before tax of GBP99.3m, 3% below prior year (6%
decrease on a constant currency basis)
- Good organic growth in large commercial aerospace and military
- Free cash flow of GBP51.7m after increased capital expenditure
of GBP48.6m
- Acquisitions bring new capabilities to the Group
- Full year dividend proposed to increase by 10%
- Near-term challenging conditions continue but Group outlook remains
encouraging over the medium-term
Commenting on the results, David Squires, Chief Executive of
Senior plc, said:
"Senior has delivered a solid set of results in 2015 against the
backdrop of challenging conditions in some of our end markets. 2015
was a year of significant activity for our Aerospace Division with
some mature programmes ramping down and newer programmes nearing
completion of their industrialisation phase. In 2016 we expect
growth in our Aerospace business as volumes start to ramp on the
newer programmes. Flexonics faced difficult market conditions in
2015 and we expect that to continue into 2016 and so the Group
continues to take appropriate mitigating cost management and
efficiency actions. The Group is financially robust and remains
well positioned for the future as new Aerospace and Flexonics
programmes and products enter production and as Senior increasingly
benefits from its strong customer relationships and global
footprint."
For further information please contact:
Derek Harding, Group Finance Director, Senior
plc 01923 714722
Bindi Foyle, Head of Investor Relations & Leadership
Development, Senior plc 01923 714725
Philip Walters, Finsbury 020 7251 3801
This Release represents the Company's dissemination announcement
in accordance with the requirements of Rule 6.3.5 of the Disclosure
and Transparency Rules of the United Kingdom's Financial Services
Authority. The full Annual Report & Accounts 2015, together
with other information on Senior plc, may be found at:
www.seniorplc.com
The information contained in this Release is an extract from the
Annual Report & Accounts 2015, however, some references to
Notes and page numbers have been amended to reflect Notes and page
numbers appropriate to this Release.
The Directors' Responsibility Statement has been prepared in
connection with the full Financial Statements and Directors' Report
as included in the Annual Report & Accounts 2015. Therefore,
certain Notes and parts of the Directors' Report reported on are
not included within this Release.
(1) Before acquisition costs of GBP1.2m (2014 - GBP0.6m), amortisation
of intangible assets arising on acquisitions of GBP12.2m (2014
- GBP7.2m), impairment of inventory relating to the suspended
L85 aircraft programme of GBPnil (2014 - GBP1.8m), restructuring
costs of GBPnil (2014 - GBP1.5m), loss on sale and write-down
of fixed assets of GBP1.5m (2014 - GBPnil), goodwill impairment
charge of GBP18.8m (2014 - GBP9.4m), impairment of assets held
for sale of GBP1.8m (2014 - GBPnil) and pension curtailment charge
of GBPnil (2014 - GBP1.5m).
(2) See Notes 11b and 11c for derivation of free cash flow and of
net debt, respectively.
The Group's principal exchange rates for the US dollar and the Euro,
applied in the translation of revenue, profit and cash flow items
at average rates were $1.53 (2014 - $1.65) and EUR1.37 (2014 - EUR1.24),
respectively. The US dollar and Euro rates applied to the balance
sheet at 31 December 2015 were $1.47 (2014 - $1.56) and EUR1.36 (2014
- EUR1.29), respectively.
Webcast
There will be a presentation on Monday 29 February 2016 at
11.00am GMT, with a live webcast that is accessible on Senior's
website at www.seniorplc.com/investors. The webcast will be made
available on the website for subsequent viewing.
Note to Editors
Senior is an international manufacturing Group with operations
in 14 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.
Cautionary Statement
This Release 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 Release and they
should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any
such forward-looking information.
CHIEF EXECUTIVE'S STATEMENT
Since joining the Group on 1 May 2015 and succeeding Mark
Rollins as Group CEO on 1 June 2015, I have immersed myself in the
business and spent time with many stakeholders including customers,
investors, our leadership teams and other employees across the
Group from shop floor to boardroom. Since last May, I have visited
all 33 operating businesses across the 14 countries in which we
operate. As intended, this has given me a clear understanding of
our business. What I discovered as I visited our operations was
confirmation of my expectations as I joined Senior: I was joining a
company that was already well run and therefore the primary focus
would be on enhancing a business that is well positioned for the
future, rather than having to completely transform the
organisation. That said, there is much to do to ensure that the
Group continues to grow sustainably, maintains and improves its
competitiveness and meets our customers' demands for ever-improving
levels of operational excellence.
I will comment more on the work which the Executive Leadership
Team has been doing since I joined, but first let me comment on the
2015 results.
Overview of 2015 Results
Senior delivered a solid set of results in 2015 given the
challenging conditions in some of our end markets.
Group revenue increased by 3.5% to GBP849.5m. This included a
favourable exchange impact of GBP24.9m and the beneficial
incremental impact from three acquisitions of GBP25.4m. Excluding
the year-on-year effect of acquisitions, Group revenue from organic
operations was down GBP21.6m on a constant currency basis. The
overall organic revenue decline was primarily due to gains within
the Aerospace Division that were more than offset by declines in
the Flexonics Division, reflecting the challenging market
conditions faced by the truck and off-highway and industrial
businesses.
Adjusted operating profit decreased by GBP3.8m (3.4%) to
GBP107.8m, with the Group achieving an adjusted operating margin of
12.7%. This included a favourable exchange impact of GBP3.9m and
GBP1.6m of year-on-year operating profit contributed by
acquisitions. Adjusted operating profit from organic operations
decreased by 8.1% on a constant currency basis, excluding the
effect of acquisitions and exchange movements. As previously
disclosed, margins were impacted during the year by volume
reductions on mature programmes, such as the A330, lower profits on
aluminium revert prices, temporary activities to protect customer
schedules and volume reductions in the off-highway, power and
energy markets.
(MORE TO FOLLOW) Dow Jones Newswires
February 29, 2016 02:00 ET (07:00 GMT)
In challenging market conditions, it is important to balance the
desire to cut costs with maintaining appropriate production
capacity. The Group diligently implemented a number of cost
reduction actions during the year, particularly within the
Flexonics Division. These included: transferring work to
competitive cost countries, implementing furloughs at specific
factories, reducing Flexonics headcount from 3,057 to 2,783 and
curbing non-essential discretionary spending.
The Group continues to generate healthy cash flow and delivered
free cash inflow of GBP51.7m after gross investment in capital
expenditure of GBP48.6m. This investment in capital equipment is
essential in our business to meet increasing levels of demand that
are being communicated to us by our Aerospace customers. The level
of net debt at the end of December 2015 was GBP194.6m and the ratio
of net debt to EBITDA was 1.4x, within the Group's normal target
range of 0.5x to 1.5x and comfortably below the Group's bank
covenant level of 3.0x. The Group is financially strong and is able
to fund future organic and acquisitive growth.
Recognising the underlying strength of the business and its
future prospects, the Board is proposing a final dividend of 4.36
pence per share. This would bring total dividends, paid and
proposed for 2015 to 6.20 pence per share, representing an increase
of 10% over the prior year.
Strategy
The Group's overall strategy remains unchanged. Demand for large
commercial aircraft remains robust with Boeing and Airbus having
record 9-year orderbooks. Trends in world air traffic are positive
and are forecast to remain so. In addition, new platforms in
military, regional and business jet markets, combined with
increasing shipset content, will help propel future growth. While
exposure to certain markets in our Flexonics Division poses
near-term challenges, we are confident of the long-term
attractiveness of these end markets and in particular of the many
growth opportunities with existing and new customers in this
sector. It is our intention to retain the balance between Aerospace
and Flexonics and to grow both segments of our business. Of course,
from time to time it is appropriate to review the portfolio of the
Group and where necessary specific disposals or mergers of
operations will be considered.
Over the past six months, the Executive Leadership Team has
undertaken a strategic assessment of the business and has developed
goals and priorities which have been reviewed, discussed and agreed
with the Board. These strategic priorities are set out below:
1. Enhance Senior's Autonomous and Collaborative Business Model
Senior's business model is one of empowering and holding
accountable individual businesses, operating within a clearly
defined divisional structure, to develop and deliver business plans
in line with overall Group strategy. This allows Senior to retain
an entrepreneurial spirit as it grows, which in turn enables
innovative solutions to be developed for our customers and agility
in decision-making and delivery. At the same time, a strong control
framework ensures disciplined governance is maintained. The control
framework is continuously improved, taking account of changing
legislation, regulations and best practices. Increasing
collaboration amongst business in the Group is a priority to ensure
economies of scale are realised whilst maintaining the autonomous
business structure. Business leaders throughout Senior are actively
embracing collaboration activities with priorities set at Group
level in consultation with the operating units.
Our plans for 2016:
-- Implement engagement guidelines to help optimise the transfer
of work to cost competitive locations and to facilitate higher
level solutions to meet customer needs;
-- Appoint key customer account managers to facilitate greater customer
intimacy and alignment and leverage cross-selling opportunities;
-- Engender a deeper culture of shared practice and know-how across
the Group by tailoring the management incentive scheme to encourage
further collaboration; and
-- Roll out Group-wide interactive communication tools and processes
to facilitate further collaboration.
2. Focus on Growth
Senior's end markets grow naturally at around 4% through the
cycle. We believe it is possible to outgrow our end markets and we
seek to do that both organically and through acquisition by:
-- Growing market share, particularly with key customers;
-- Focusing on innovation;
-- Geographical expansion; and
-- Seeking out and exploiting adjacent opportunities.
Our operating businesses are increasingly working together to
ensure we remain aligned to our customers. There is much more we
can do in this area and plans are being developed to leverage our
natural strengths between specific operating businesses and
specific customers. There are opportunities for higher level
products and sub-systems to be offered to customers through the
combined resources and capabilities of two or more operating
businesses. This is underway where it makes sense to do so.
Technology road maps are being developed, taking account of
customer feedback regarding their future requirements. Our
manufacturing expertise is highly regarded and we aim to stay at
the forefront by tracking and investing in advanced manufacturing
methods and the use of advanced materials. This is an area that is
receiving additional focus moving forward.
Geographically, our markets in Europe and North America remain
compelling, however Asia still represents the largest incremental
growth region for the Group. We are aggressively and proactively
pursuing our opportunities in Asia.
We will continue to supplement organic growth with acquisitive
growth, retaining our pragmatic approach to identifying and
executing transactions that will enhance capability across the
Group. An integration playbook has been developed and is now being
deployed to ensure that post acquisition integration is effective
for both Senior and the acquired businesses. Integration progress
will be reviewed regularly by the Executive Leadership Team. The
same new robust business review process that is being introduced
for the existing portfolio will also apply to all acquisitions.
Our plans for 2016:
-- Further increase our levels of customer intimacy and alignment;
introduce key customer account managers;
-- Further investments in 3D printing/ additive manufacturing capability;
-- Launch new production programmes at our new and improved facilities
in India, Mexico, Malaysia and Thailand; and
-- Complete Steico integration.
3. Introduce a High Performance Operating System
Senior is implementing a high performance operating system,
drawing on the many excellent practices from individual operating
units across the Group. The key elements of this system
include:
-- An operational toolkit readily available to all businesses incorporating:
best practice processes such as lean and continuous improvement
techniques; supplier management and development processes; engineering,
new product introduction (NPI) and project management processes;
5/6S methodology; factory visual management systems as well as
other operational areas such as risk management and financial
management.
-- A strengthened business review process at operating business,
Division and Group levels utilising a balanced scorecard incorporating
KPIs that are relevant for each operating business. The focus
of the business review process is on performance, growth, operational
excellence and talent development.
Our plans for 2016:
-- Introduce best practice operational toolkit and processes;
-- Introduce a new holistic and intensive business review process;
-- Update the Group's reporting systems and data collection infrastructure
to improve efficiency and facilitate faster decision making;
and
-- Establish a procurement council to leverage our global spend
and to implement best in class supply chain processes.
4. Competitive Cost Country Strategy
Senior has established manufacturing facilities in 14 countries
around the world. We are continuing to invest capital to ensure our
businesses stay competitive at a capability and cost level. Much of
the investment is focused at our facilities in Thailand, Malaysia,
China, India, Mexico and the Czech Republic to help ensure we meet
our customers' cost and price challenges whilst protecting margins.
We will actively move products and establish increasingly
sophisticated capabilities in these competitive cost economies to
free up capacity in our European and North American factories which
is needed to satisfy anticipated increasing levels of demand.
Our plans for 2016:
-- Complete the construction of Phase 2 of our new facility in Thailand
for airframe structures;
-- Ramp-up cooler production at our new facility in India;
-- Ramp-up common rail production in Flexonics Mexico;
-- Transfer various fluid systems and structures work packages to
Aerospace Mexico; and
-- Begin construction of a new facility in the Czech Republic to
support new programmes in both the Flexonics and Aerospace Divisions.
5. Considered and Effective Capital Deployment
(MORE TO FOLLOW) Dow Jones Newswires
February 29, 2016 02:00 ET (07:00 GMT)
Senior understands the importance of considered and effective
capital deployment in the interest of maximising the creation of
shareholder value. The Executive Leadership Team continually
reviews investment priorities across the Group to ensure that the
best choices are made for the allocation of capital. All
significant investments undertaken by Senior are assessed using a
rigorous investment appraisal process and are supported by a
business case. The Group has a financial objective to maintain an
overall return on capital employed in excess of the Group's cost of
capital and to target a pre-tax return in excess of 15%.
Our plans for 2016:
-- Invest approximately GBP45m in organic capital expenditure;
-- Continue to pay a progressive dividend reflecting earnings per
share and free cash flow generation over the medium term; and
-- Reduce the level of working capital as a % of revenue.
6. Talent Development
Senior has a skilled workforce and some highly experienced
entrepreneurial business leaders. We are bringing renewed focus to
further developing leadership talent and upgrading functional
capability across the Group. We are ensuring robust succession
plans are in place across our operating businesses and Divisions.
We are working with capable external partners to deliver tailored
training and development programmes for Senior's top talent.
Our plans for 2016:
-- Recruit a Group HR director, a new position for the Group;
-- Work with our external partners, to deliver advanced leadership
development for our top talent from around the world;
-- Further develop our succession planning processes; and
-- Collaborate across the businesses on recruitment and selection.
To complement these strategic goals and priorities, we have
defined the core values which underpin the culture we aim to
nurture in Senior. At a practical governance level we have updated
key policies, such as the Senior Code of Conduct, as part of a
holistic Corporate Framework. These updated policies are being
implemented with training for all appropriate employees during the
first half of 2016.
Summary
I am excited about the future of Senior plc. Of course, there
are some near-term challenges in some of our cyclical industrial
and land vehicle markets - we are monitoring these carefully and
responding accordingly. In Aerospace, order books for large
commercial aircraft have never been higher, extending to more than
9 years. Anyone who has flown in the most modern aircraft, will
know that it is not just greater fuel efficiency that is driving
record levels of new aircraft deliveries; it is also demand from
increasingly knowledgeable passengers for greater levels of comfort
and a better overall flying experience. When one considers that 1
in 2 of the world's population has never travelled by air, then it
is reasonable to conclude that the decades' long growth experienced
in this industry is set to continue for many more years. In all of
our markets we work with truly world-class companies, leaders in
their sectors; we will maintain an ever closer dialogue about their
present and future requirements so we can tailor our investments
accordingly.
Our company is financially robust and we will continue with our
pragmatic approach that balances our growth objectives. We will
ensure our capital is deployed in a manner that provides strong
returns and enhances shareholder value.
Market Conditions
Aerospace markets continue to be generally buoyant while land
vehicle and industrial markets remain challenging.
The production ramp-up of new engine option single aisle and
wide-body aircraft means the outlook for the large commercial
aerospace sector is both strong and visible. Airbus has announced
that they are planning to increase single aisle aircraft production
to a rate of 60 per month in 2019 and Boeing has announced a
similar increase to a rate of 57 in 2019. Airbus has already
delivered their first A320neo in January 2016 while Boeing
successfully completed the first flight of their 737 MAX with LEAP
1B engines.
The Group is a supplier to all of the major aero-engine
manufacturers and will benefit in particular from additional
content on the new CFM International LEAP engines, the Pratt and
Whitney Geared Turbo Fan engines, as well as the Rolls-Royce Trent
1000, Trent 7000 and XWB engines.
In the Flexonics Division, progress continues with the
development of Senior's EGR cooler offering, with product on test
with a number of potential new customers. Overall volumes in
heavy-duty trucks increased in 2015, although growth slowed in the
second half of the year and is expected to decline in 2016. The
off-highway sector has been weak in 2015 and remains so in the
early months of 2016. Passenger vehicle demand in Europe was strong
through 2015 and into 2016.
The Petrochemical market remains uncertain. The direct impact of
lower oil prices can be seen from the equipment destocking evident
across the sector, thus reducing activity at LPE and Upeca
Flexonics. As this destocking completes we can expect some recovery
in demand with fuller recovery once oil prices recover to a stable
level.
Outlook
2016 has started much as 2015 ended with mixed trading
conditions across our end markets. In Aerospace we expect further
revenue growth in 2016 with a stronger profit in the second half,
driven by increasing revenues and the operational improvements we
are implementing across the Division. However, challenging market
conditions in some of our Flexonics markets, including truck and
off-highway and oil and gas, mean that the outlook for Flexonics
remains uncertain. Whilst the Group will continue with its focus on
cost management and efficiency initiatives, these challenging
conditions are expected to outweigh progress in the Aerospace
Division.
Looking further ahead, the Board believes Senior remains well
positioned to make good progress. Senior has established a global
footprint which is providing opportunities to increase market share
and deliver strong organic growth. New aerospace programmes are
entering production, whilst build rates on key existing platforms
are increasing, thus providing opportunities for improvements in
operational efficiency. Staying focused on customer alignment,
operational excellence and investing in organisational capability
and leadership talent will enable Senior to continue to grow
organically over the longer-term. Furthermore, Senior's
cash-generative nature and robust financial position provide a
solid platform from which the Group can continue to pursue growth
opportunities to complement its existing portfolio.
DAVID SQUIRES
Group Chief Executive
DIVISIONAL REVIEW
Aerospace Division
The Aerospace Division represents 68% (2014 - 65%) of Group
revenue and consists of 19 operations. These are located in North
America (ten), the United Kingdom (four), continental Europe
(three), Thailand and Malaysia. The Division's operating results on
a constant currency basis are summarised below:
2015 2014 (1) Change
GBPm GBPm
Revenue 575.0 559.5 +2.8%
Adjusted operating profit 76.8 81.2 -5.4%
Adjusted operating margin 13.4% 14.5% -1.1ppts
(1) 2014 translated using 2015 average exchange rates - constant
currency.
Divisional revenue increased by GBP15.5m (2.8%) to GBP575.0m
(2014 - GBP559.5m(1) ) whilst adjusted operating profit decreased
by GBP4.4m (5.4%) to GBP76.8m (2014 - GBP81.2m(1) ). Excluding the
current year contribution of Steico, acquired in December 2015
(revenue of GBP0.9m; adjusted operating profit of less than
GBP0.1m) and the incremental full-year contribution from the
acquisition of Upeca Aerospace in April 2014 (revenue of GBP3.1m;
adjusted operating profit of GBP0.3m), organic revenue for the
Division increased by GBP11.5m (2.1%) whilst adjusted operating
profit decreased by GBP4.7m (5.8%) compared to 2014.
Revenue Reconciliation GBPm
2014 revenue 559.5
Large commercial 7.6
Regional & business jets (4.5)
Military 12.1
Other (3.7)
------
2015 organic 571.0
Acquisitions 4.0
------
2015 revenue 575.0
======
The Division's most important market is large commercial
aircraft where Boeing and Airbus collectively delivered 1,397
aircraft in 2015, 3.3% more than the prior year. They booked net
orders of 1,848 aircraft, which were ahead of aircraft deliveries
for the sixth year in succession. As a consequence, their combined
order book grew to 12,626 aircraft at the end of the year,
representing a very healthy nine years' production at current build
rates, meaning good growth can be expected in the future.
Senior's sales in the large commercial aircraft sector increased
by 3.3%(1) during the year, with organic growth, excluding
acquisitions, of 2.3%. The Group benefited from higher deliveries
of the 737 and 787 and increased production of the A350; however,
these increases were partly offset by the impact of the decline in
A330 build rates, particularly in relation to the Trent 700
engine.
The Division's sales to the regional jet market increased by
9.5%(1) in the year, mainly as a result of increased non-recurring
engineering revenue on the Mitsubishi Regional Jet programme, which
flew for the first time in November 2015. Revenue derived from the
business jet sector declined by 13.5%(1) during the year, with
organic revenue down 14.0% due to Bombardier's decision to cancel
the Learjet 85 ("L85") programme and due to reductions in Global
5000/6000 build rates.
(MORE TO FOLLOW) Dow Jones Newswires
February 29, 2016 02:00 ET (07:00 GMT)
Revenue from the military and defence sector increased by
12.4%(1) in the year, with organic growth, excluding acquisition,
of 11.9% primarily due to improved pricing and increases in
production of the Joint Strike Fighter, A400M and P-8. This was
offset partially by the anticipated build rate reductions for V-22
Osprey and CH-47 Chinook, coupled with the non-repeat of a Black
Hawk spares order from 2014.
Around 10% of the Aerospace Division's revenue was derived from
other markets such as space, non-military helicopters, power and
energy, medical and semi-conductor equipment, where the Group
manufactures products using very similar technology to that used
for certain aerospace products. Overall, revenue derived from these
markets decreased by 6.2%(1) on an organic basis, mainly due to
reduced income from machined waste metal as a result of lower
prices of waste aluminium and reduced power and energy related
sales, partly offset by increased sales to the semi-conductor
equipment market.
The divisional adjusted operating margin declined by 1.1
percentage points to 13.4% (2014 - 14.5%)(1) . Margins were
impacted by volume reductions for the Trent 700 engine for the
A330, reductions in build rates of Global 5000/6000, the
cancellation of L85, lower aluminium revert prices and costs
associated with temporary activities in the second half of the year
to protect customer schedules. Additionally, costs associated with
the industrialisation of new programmes such as the A350, the
A320neo and the ramp-up of the Trent 1000 TEN engine were higher in
the first half of year, but reduced in the second half as
industrialisation transitions to series production.
On 17 December 2015, the Group acquired Steico Industries, Inc.
("Steico"), a leading manufacturer of precision tube and duct
assemblies for the commercial and defence aerospace industries,
based in Oceanside, California, USA. Steico brings new and adjacent
capabilities to the Group and enables the Division to offer the
full range of tube and duct assemblies covering a wider scope of
aerospace fluid systems. With content on key growth platforms such
as the 737 MAX, A350 and Joint Strike Fighter, the business is
expected to outgrow end markets.
On 21 December 2015, Senior signed an agreement to sell the
assets of the Group's small Wichita based commodity composites
business to Leading Composite Technologies Inc. The sale was
completed on 16 February 2016.
Senior has healthy content on the A320neo, 737 MAX, 787, A350
and Joint Strike Fighter, all of which are forecasting significant
increases in production over the coming years. The Group will also
benefit from greater content on the new engine aircraft, with 43%
more content on the A320neo, 36% more on the 737 MAX, 18% more on
the A330neo and 94% more on Embraer's E2-Jets, than the current
A320, 737, A330 and ERJ175/190/195 aircraft, respectively. Customer
deliveries of the A320neo began in January 2016, whilst the 737 MAX
and A330neo are scheduled to enter service in 2017 and the E2-Jet
in 2018.
Overall the future prospects for the Group's Aerospace Division
are visible and encouraging.
Flexonics Division
The Flexonics Division represents 32% (2014 - 35%) of Group
revenue and consists of 14 operations which are located in North
America (four), continental Europe (three), the United Kingdom
(two), South Africa, India, Brazil, Malaysia, and China where the
Group also has a 49% equity stake in a land vehicle joint venture.
The Division's operating results on a constant currency basis are
summarised below:
2015 2014 (1) Change
GBPm GBPm
Revenue 274.9 286.5 -4.0%
Adjusted operating profit 39.4 44.4 -11.3%
Adjusted operating margin 14.3% 15.5% -1.2ppts
(1) 2014 results translated using 2015 average exchange rates -
constant currency.
Divisional revenue decreased by GBP11.6m (4.0%) to GBP274.9m
(2014 - GBP286.5m(1) ) and adjusted operating profit declined by
GBP5.0m (11.3%) to GBP39.4m (2014 - GBP44.4m(1) ). Excluding the
current year contribution of LPE, acquired at the end of March 2015
(revenue of GBP16.9m; adjusted operating profit of GBP0.8m) and the
incremental full-year contribution from the acquisition of Upeca
Flexonics in April 2014 (revenue of GBP4.5m; adjusted operating
profit of GBP0.5m), organic revenue for the Division declined by
GBP33.0m (11.5%) and adjusted operating profit decreased by GBP6.3m
(14.2%).
Revenue Reconciliation GBPm
2014 revenue 286.5
Truck and off-highway (18.8)
Passenger vehicles 0.9
Industrial (15.2)
Other 0.1
-------
2015 organic 253.5
Acquisitions 21.4
-------
2015 revenue 274.9
=======
Total Group sales to truck and off-highway markets decreased by
17.5%(1) . Senior's sales to the North American truck market
decreased by GBP4.7m (8.2%), with broadly flat sales of EGR coolers
for new vehicles, as market production slowed in the second half of
the year, and spares sales were lower as product longevity improved
following technological advances made by Senior. Sales to the North
American off-highway market decreased by GBP8.8m (32.0%) due to
weaker demand for agricultural and mining vehicles; this has also
resulted in an impairment loss of GBP18.8m relating to the goodwill
allocated to our GA business. Sales to European truck and
off-highway markets declined by GBP5.4m (27.7%) due to non-repeat
of prior year prebuild by our customers ahead of further tightening
of Tier 4 emission regulations and lower sales of high-pressure
rails as a result of our customer's joint venture concluding.
Group sales to passenger vehicle markets increased by 1.8%(1) in
the year, with modest improvements in the Division's main European
market, partially offsetting weaker market demand in Brazil. In
India, a new 26,000 sq. ft. leased facility is being fitted-out to
support a new EGR cooler contract for a customer who has
established a new production operation in India. Production is
anticipated to ramp-up in 2016.
In the Group's industrial markets, organic sales excluding the
benefit of Upeca Flexonics and LPE were down 12.1%(1) . Organic
sales to petrochemical markets were up GBP1.8m (4.1%) with weaker
markets offset by the incremental sales from the large industrial
expansion joint orders for North American and South Korean
petrochemical projects that shipped between H2 2014 and Q3 2015. As
anticipated, organic sales to power and energy markets decreased by
GBP13.9m (27.8%) due to weaker power generation and nuclear
activity, and lower revenue from fuel cell dielectrics due to lower
volumes and a reduction in price resulting from a design change.
Elsewhere, weaker European solar and HVAC sales, coupled with lower
sales to steel mills and medical markets, were partly offset by
slightly improved Canadian sales to HVAC and cryogenic markets.
The adjusted operating margin decreased to 14.3% (2014 - 15.5%).
On an organic basis, excluding acquisition of LPE, the margin
declined by 0.5 percentage points to 15.0% principally due to the
impact of volume reductions in the off-highway and power and energy
markets, offset partly by appropriate cost mitigating actions and
favourable sales mix from the large industrial expansion joint
orders.
On 31 March 2015, the Group acquired LPE, a leading manufacturer
of precision-machined components, fabrications, assemblies and kit
sets for the oil and gas, telecommunications, aerospace, defence,
land and sea systems, nuclear and marine industries, based in
Lymington, Hampshire, UK. LPE has seen some weakness in its core
oil and gas related markets, compounded by destocking across the
industry and we expect this to continue through 2016. However, we
remain confident of the medium- to longer-term prospects of this
business as LPE strengthens Senior's precision machining
capabilities and provides access to its strong customer
relationships and adjacent markets.
In 2016, production of North American heavy-duty diesel trucks
is forecast to decline further as a result of overall industrial
slowdown coupled with a longer replacement cycle and the
off-highway market is expected to remain weak due to the indirect
impacts of lower oil and commodity prices. However, the Group
anticipates partly offsetting some of these market headwinds with
new product launches such as EGR coolers for a large off-highway
customer. Industrial markets, particularly oil and gas related, are
expected to remain challenging in the near term as investment in
the sector is reduced or postponed.
Looking further ahead, global environmental legislation
continues to tighten and coupled with projected increases in global
energy usage, will drive increased demand for many of the Flexonics
Division's products. Senior is developing solutions for the next
generation of diesel engines, as well as alternative energy
applications. As a result of its global footprint, technical
innovation and customer relationships, the Group remains well
positioned for the future as new Flexonics programmes and products
enter production.
FINANCIAL REVIEW
Financial Summary
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February 29, 2016 02:00 ET (07:00 GMT)
A summary of the Group's operating results (at reported
currency) is set out in the table below. Further detail on the
performance of each Division is set out above in the Divisional
Review.
Adjusted
operating
Revenue profit (1) Margin
-------------- -------------- ------------
2015 2014 2015 2014 2015 2014
GBPm GBPm GBPm GBPm % %
Aerospace 575.0 536.6 76.8 77.9 13.4 14.5
Flexonics 274.9 284.6 39.4 43.5 14.3 15.3
Share of results
of joint venture - - 0.4 (0.3) - -
Inter-segment sales (0.4) (0.4) - - - -
Central costs - - (8.8) (9.5) - -
------ ------ ------ ------ ----- -----
Group total 849.5 820.8 107.8 111.6 12.7 13.6
====== ====== ====== ====== ===== =====
(1) See table below for reconciliation of adjusted operating profit
to reported operating profit
Financial Detail
Revenue
Group revenue increased by 3.5% to GBP849.5m (2014 - GBP820.8m).
This included a favourable exchange impact of GBP24.9m and the
beneficial incremental impact from three acquisitions of GBP25.4m
(GBP0.9m from Steico acquired in December 2015, GBP16.9m from LPE
acquired in March 2015 and GBP7.6m from Upeca acquired in April
2014). Excluding the year-on-year effect of acquisitions and
favourable exchange, Group revenue from organic operations was down
GBP21.6m on a constant currency basis. In 2015, 63% of revenue
originated from North America, 16% from the UK, 11% from the Rest
of Europe and 10% from the Rest of the World.
Operating profit
Adjusted operating profit decreased by GBP3.8m (3.4%) to
GBP107.8m (2014 - GBP111.6m), with the Group achieving an adjusted
operating margin of 12.7% (2014 - 13.6%). This included a
favourable exchange impact of GBP3.9m and the year-on-year adjusted
operating profit contributed by acquisitions of GBP1.6m (Steico
less than GBP0.1m, LPE GBP0.8m and Upeca GBP0.8m). If the effect of
acquisitions and exchange movements are excluded, adjusted
operating profit from organic operations decreased by 8.1% on a
constant currency basis.
Adjusted operating profit may be reconciled to the operating
profit that is shown in the Consolidated Income Statement as
follows:
2015 2014
GBPm GBPm
----------------------------------------------------- ------- ------
Adjusted operating profit 107.8 111.6
Exceptional pension charge - (1.5)
Goodwill impairment (18.8) (9.4)
Impairment of assets held for resale (1.8) -
Restructuring costs - (1.5)
Write-down of L85 inventory - (1.8)
Amortisation of intangible assets from acquisitions (12.2) (7.2)
Loss on sale and write-down of fixed assets (1.5) -
Acquisition costs (1.2) (0.6)
Operating profit per Financial Statements 72.3 89.6
----------------------------------------------------- ------- ------
Finance costs
Total finance costs, net of investment income of GBP0.3m (2014 -
GBP0.1m), decreased to GBP8.5m (2014 - GBP9.0m). Net interest costs
on borrowings decreased to GBP8.0m (2014 - GBP8.1m) as the lower
blended interest rate on committed facilities, following the
repayment of $35.0m and $25.0m private placement loan notes during
H2 2014 and 2015 respectively, offset the effects of the increased
debt associated with the acquisition of LPE and Steico and the
adverse foreign exchange impact on the translation of interest on
US dollar denominated borrowings. The net IAS 19 pension finance
cost decreased to GBP0.5m (2014 - GBP0.9m) principally due to a
reduction in the net retirement benefit obligations at 31 December
2014 compared to 31 December 2013.
Research and development
The Group's expenditure on research and development increased to
GBP16.3m during 2015 (2014 - GBP11.5m). Expenditure was incurred
mainly on designing and engineering products in accordance with
individual customer specifications and developing specific
manufacturing processes for their production.
Profit before tax
Adjusted profit before tax decreased by GBP3.3m (3.2%) to
GBP99.3m (2014 - GBP102.6m). On a constant currency basis, adjusted
profit before tax decreased by 6.2% (2014 - GBP105.9m). Reported
profit before tax decreased GBP16.8m to GBP63.8m (2014 - GBP80.6m).
The reconciling items between adjusted and reported profit before
tax are shown in Note 4 of the Financial Statements.
Exchange rates
Around 82% of the Group's profits are generated outside of the
UK and, consequently, exchange rates can significantly affect the
Group's results. Exchange rates used for the currencies most
relevant to the Group's operations are:
Profit and loss - average Balance sheet - period end
rates rates
------------------------------ -------------------------------
2015 2014 GBP Impact 2015 2014 GBP Impact
GBP: US
Dollar 1.53 1.65 +7.8% 1.47 1.56 +6.1%
GBP: Euro 1.37 1.24 -9.5% 1.36 1.29 -5.1%
Using 2015 average rates would have increased 2014 revenue by
GBP24.9m and increased 2014 adjusted operating profit by GBP3.9m. A
10 cents movement in the GBP:$ exchange rate is estimated to affect
full-year revenue by GBP35m, operating profit by GBP4.7m and net
debt by GBP10m. A 10 cents movement in the GBP:EUR exchange rate is
estimated to affect full-year revenue by GBP6m, operating profit by
GBP0.3m and net debt by less than GBP0.3m.
Tax charge
The adjusted tax rate for the year was 20.0% (2014 - 19.5%),
being a charge of GBP19.9m (2014 - GBP20.0m) on adjusted profit
before tax of GBP99.3m (2014 - GBP102.6m). Over the medium term our
tax rate is likely to increase as the mix of our business changes
and we respond to legislative changes arising from the OECD's Base
Erosion Profit Shifting ("BEPS") project. Cash tax paid as a
percentage of adjusted profit before tax was 8.0% (2014 - 12.4%).
The rate of cash tax paid is lower than our adjusted tax rate in
both years due to the availability of tax losses, accelerated tax
relief for capital expenditure and tax deductible items that do not
affect adjusted profit. Our reported tax rate, including items
excluded from adjusted operating profit of GBP4.6m (2014 -
GBP2.9m), was 24.0% (2014 - 21.2%), being a charge of GBP15.3m
(2014 - GBP17.1m) on reported profit before tax of GBP63.8m (2014 -
GBP80.6m).
Tax policy
The Group believes it has a corporate responsibility to act with
integrity in all tax matters. It is the Group's obligation to pay
the amount of tax legally due and to observe all applicable rules
and regulations in the jurisdictions in which it operates. While
meeting this obligation, the Group also has a responsibility to its
shareholders to plan, manage and control tax costs. The Group seeks
to achieve this by conducting business affairs in a way which is
efficient from a tax perspective, including maintaining appropriate
levels of debt in the countries we operate in and claiming
available tax credits and incentives. The Group is committed to
building constructive working relationships with the tax
authorities of the countries in which it operates. The Group is
also paying close attention to changes in international tax
legislation arising from the OECD's BEPS project to ensure
continued compliance within an ever-changing environment.
Earnings per share
The weighted average number of shares, for the purposes of
calculating undiluted earnings per share, increased to 418.3
million (2014 - 416.3 million). The increase arose principally from
the vesting of shares awarded under the Group's Long-Term Incentive
Plan. Adjusted earnings per share decreased by 4.3% to 18.98 pence
(2014 - 19.84 pence). Basic earnings per share decreased by 24.0%
to 11.59 pence (2014 - 15.25 pence). See Note 7 of the Financial
Statements for details of the basis of these calculations.
Cash flow
The Group generated significant free cash flow of GBP51.7m in
2015 (2014 - GBP57.8m) as set out in the table below:
2015 2014
GBPm GBPm
--------------------------------------------- -------- --------
Operating profit 72.3 89.6
Depreciation and amortisation 40.0 32.1
Share of joint venture (0.4) 0.3
Working capital movement (12.0) (16.5)
Pension payments above service cost (8.8) (9.1)
Goodwill impairment 18.8 9.4
Other items 5.5 4.0
--------------------------------------------- -------- --------
Cash generated by operations 115.4 109.8
--------------------------------------------- -------- --------
Interest paid (net) (7.9) (8.4)
Income tax paid (7.9) (12.7)
Capital expenditure (48.6) (31.1)
Sale of fixed assets 0.7 0.2
--------------------------------------------- -------- --------
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February 29, 2016 02:00 ET (07:00 GMT)
Free cash flow 51.7 57.8
--------------------------------------------- -------- --------
Dividends (24.3) (21.9)
Acquisitions (103.9) (60.1)
Debt assumed with acquisition (3.7) (14.3)
Loan to joint venture (0.1) (1.1)
Share issues - 1.1
Purchase of shares held by employee benefit
trust (0.9) (0.7)
Foreign exchange variations (8.4) (6.6)
Opening net debt (105.0) (59.2)
--------------------------------------------- -------- --------
Closing net debt (194.6) (105.0)
--------------------------------------------- -------- --------
Capital expenditure
Gross capital expenditure increased by 56.3% in 2015 to GBP48.6m
(2014 - GBP31.1m), principally due to investment in future growth
programmes and necessary replacement and compliance expenditure.
The Group's operations remain well capitalised. The disposal of
assets no longer required raised GBP0.7m (2014 - GBP0.2m). Similar
capital expenditure is anticipated for 2016, with the extent
dependent primarily upon the timing of build rate increases in the
large commercial aircraft segment and the Group securing the
expected new programme wins in both Divisions.
Working capital
Working capital increased by GBP20.3m in 2015 to GBP127.9m.
GBP9.4m of this increase was acquired with LPE and Steico. The
remaining increase is primarily due to the unwinding of a higher
payables balance at 31 December 2014.
Acquisitions
On 31 March 2015, the Group acquired LPE based in Lymington,
Hampshire, UK as set out in Note 13. The initial cash consideration
was GBP44.6m comprising a net consideration of GBP45.8m after
taking account of GBP2.7m of net debt in the business at
acquisition date and a payment of GBP1.5m for its working
capital.
On 17 December 2015, the Group acquired 100% of the issued share
capital and trading facilities of Steico through a business
combination. The consideration was GBP50.2m, after taking account
of GBP0.1m working capital adjustment, for the issued share capital
and GBP10.1m for the trading facility. There is no contingent
consideration related to the acquisition. The acquisition was
funded using the Group's existing borrowing facilities and $80.0m
private placements.
Dividend
The Group has a long track record of dividend growth and the
Board intends to continue to pay a progressive dividend reflecting
earnings per share and free cash flow generation over the
medium-term.
A final dividend of 4.36 pence per share is proposed for 2015
(2014 - 3.96 pence), payment of which, if approved, would total
GBP18.3m (2014 final dividend - GBP16.6m) and would be paid on 31
May 2016 to shareholders on the register at close of business on 29
April 2016. This would bring the total dividends paid and proposed
in respect of 2015 to 6.20 pence per share, an increase of 10% over
2014. At the level recommended, the full-year dividend would be
covered 3.1 times (2014 - 3.5 times) by adjusted earnings per
share. The cash outflow incurred during 2015 in respect of the
final dividend for 2014 and the interim dividend for 2015 was
GBP24.3m (2014 - GBP21.9m).
Goodwill
The change in goodwill from GBP262.5m at 31 December 2014 to
GBP284.5m at 31 December 2015 reflects an increase of GBP2.5m due
to foreign exchange differences, an increase of GBP17.1m and
GBP21.2m due to the goodwill recognised on the acquisition of LPE
and Steico, respectively and a reduction of GBP18.8m due to the
impairment of the goodwill relating to GA.
Retirement benefit obligations
Aggregate retirement benefit liabilities at 31 December 2015
were GBP12.6m in excess of the value of pension assets,
representing a decrease in the deficit of GBP7.2m from 31 December
2014. The deficit in respect of the Group's UK defined benefit
pension plan decreased by GBP8.8m to GBP0.6m (31 December 2014 -
GBP9.4m), primarily due to contributions in excess of service costs
made by the Group. The deficit in North America and other
territories increased by GBP1.6m.
Net debt
Net debt increased by GBP89.6m to GBP194.6m at 31 December 2015
(31 December 2014 - GBP105.0m). This increase was principally due
to the acquisitions of LPE and Steico (initial cash consideration
of GBP44.6m plus net debt acquired of GBP2.7m and cash
consideration of GBP60.3m, respectively). These acquisitions were
funded using the Group's existing borrowing facilities, a new
two-year GBP20.0m revolving credit facility, new one-year term
loans totalling GBP25.0m and $80.0m private placements. Other
movements included GBP24.3m of dividend payments, GBP0.9m purchase
of own shares, GBP0.1m loan to the joint venture, GBP8.4m of
unfavourable currency movements and a free cash inflow of
GBP51.7m.
The ratio of net debt to EBITDA at the end of December 2015 was
1.4x, within the Group's target range of 0.5x to 1.5x and
comfortably below the Group's bank covenant level of 3.0x.
Funding and Liquidity
As at 31 December 2015, the Group's gross borrowings excluding
finance leases were GBP207.2m (2014 - GBP117.5m), with 75% of the
Group's gross borrowings denominated in US dollars (31 December
2014 - 87%). Cash and bank balances were GBP14.4m (31 December 2014
- GBP13.2m).
The maturity of these borrowings, together with the maturity of
the Group's committed facilities, can be analysed as follows:
Gross Committed
borrowings (1) facilities
GBPm GBPm
------------------------ ------------ --- ------------
Within one year 28.6 25.0
In the second year 56.6 64.4
In years three to five 67.6 111.0
After five years 54.4 68.0
------------------------ ------------ --- ------------
207.2 268.4
------------------------ ------------ --- ------------
(1) Gross borrowings include the use of bank overdrafts, other loans
and committed facilities, but exclude finance leases of GBP1.8m.
At the year-end, the Group had committed facilities of GBP268.4m
with a weighted average maturity of 3.7 years. These facilities
comprise private placement debt of GBP139.4m, term loans of
GBP25.0m, and revolving credit facilities of GBP104.0m The Group is
in a strong funding position, with headroom of GBP73.8m under its
facilities.
The Group has GBP3.6m of uncommitted borrowings which are
repayable on demand.
The Group's committed borrowing facilities contain a requirement
that the ratio of EBITDA (adjusted profit before interest, tax,
depreciation and amortisation) to net interest costs must exceed
3.5x, and that the ratio of net debt to EBITDA must not exceed
3.0x. At 31 December 2015, the Group was operating well within
these covenants as the ratio of EBITDA to net interest costs was
16.7x (31 December 2014 - 16.2x) and the ratio of net debt to
EBITDA was 1.4x (31 December 2014 - 0.8x).
Viability statement
In accordance with provision C.2.2 of the UK Corporate
Governance Code, the Directors consider it possible to form a
reasonable expectation as to the Group's longer-term viability and
have continued to adopt the going concern basis in preparing the
Financial Statements. The full viability statement can be found on
page 29 of the Annual Report & Accounts 2015.
Risks and uncertainties
The principal risks and uncertainties faced by the Group are set
out in detail on pages 28 to 31 of the Annual Report & Accounts
2015, which is available at www.seniorplc.com.
Derek Harding
Group Finance Director
Statement of Directors' Responsibilities
We confirm that to the best of our knowledge:
1. the Financial Statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the
assets, liabilities, financial position and profit or loss of
the Company and the undertakings included in the consolidation
taken as a whole;
2. the Strategic Report includes a fair review of the development
and performance of the business and the position of the Company
and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face; and
3. the Annual Report and Financial Statements, taken as a whole,
are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's performance,
business model and strategy.
By Order of the Board
David Squires Derek Harding
Group Chief Executive Group Finance Director
26 February 2016 26 February 2016
Consolidated Income Statement
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February 29, 2016 02:00 ET (07:00 GMT)
For the year ended 31 December 2015
Year ended Year ended
2015 2014
Notes GBPm GBPm
Revenue 3 849.5 820.8
Trading profit before one-off items 94.0 102.6
--------------------------------------- ------ ----------- -----------
Goodwill impairment 8 (18.8) (9.4)
Impairment of assets held for sale 15 (1.8) -
Write-down of L85 inventory - (1.8)
Restructuring costs - (1.5)
--------------------------------------- ------ ----------- -----------
Trading profit 73.4 89.9
Loss on sale and write-down of fixed
assets (1.5) -
Share of joint venture profit/(loss) 14 0.4 (0.3)
----------- -----------
Operating profit (1) 3 72.3 89.6
Investment income 0.3 0.1
Finance costs (8.8) (9.1)
----------- -----------
Profit before tax (2) 63.8 80.6
Tax 5 (15.3) (17.1)
----------- -----------
Profit for the period 48.5 63.5
=========== ===========
Attributable to:
Equity holders of the parent 48.5 63.5
=========== ===========
Earnings per share
Basic (3) 7 11.59p 15.25p
=========== ===========
Diluted (4) 7 11.47p 15.06p
=========== ===========
(1) Adjusted operating profit 4 107.8 111.6
(2) Adjusted profit before tax 4 99.3 102.6
(3) Adjusted earnings per share 7 18.98p 19.84p
(4) Adjusted and diluted earnings
per share 7 18.78p 19.59p
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2015
Year ended Year ended
2015 2014
GBPm GBPm
Profit for the period 48.5 63.5
----------- -----------
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Losses on cash flow hedges during the period (5.6) (2.3)
Reclassification adjustments for losses included
in profit 3.8 0.6
----------- -----------
Losses on cash flow hedges (1.8) (1.7)
Exchange differences on translation of foreign
operations (4.3) 7.9
Tax relating to items that may be reclassified 0.4 0.2
----------- -----------
(5.7) 6.4
Items that will not be reclassified subsequently
to profit or loss:
Actuarial losses on defined benefit pension
schemes (1.1) (0.9)
Tax relating to items that will not be reclassified 0.8 0.4
----------- -----------
(0.3) (0.5)
Other comprehensive (expense) / income for the
period, net of tax (6.0) 5.9
----------- -----------
Total comprehensive income for the period 42.5 69.4
=========== ===========
Attributable to:
Equity holders of the parent 42.5 69.4
=========== ===========
Consolidated Balance Sheet
As at 31 December 2015
Year ended Year ended
2015 2014
Notes GBPm GBPm
Non-current assets
Goodwill 8 284.5 262.5
Other intangible assets 72.1 28.3
Investment in joint venture 14 1.1 0.7
Property, plant and equipment 9 206.6 167.6
Deferred tax assets 6.7 6.5
Loan to joint venture 14 1.1 0.4
Trade and other receivables 0.3 0.4
----------- -----------
Total non-current assets 572.4 466.4
----------- -----------
Current assets
Inventories 126.9 119.3
Loan to joint venture 14 0.1 0.7
Current tax receivables 5.1 0.6
Trade and other receivables 140.6 137.1
Cash and bank balances 11c) 14.4 13.2
Assets classified as held for sale 15 1.8 -
-----------
Total current assets 288.9 270.9
-----------
Total assets 861.3 737.3
===========
Current liabilities
Trade and other payables 138.2 146.8
Current tax liabilities 20.5 13.3
Obligations under finance leases 0.8 0.3
Bank overdrafts and loans 28.6 24.1
Provisions 1.4 2.0
Liabilities classified as held for
sale 15 1.1 -
----------- -----------
Total current liabilities 190.6 186.5
----------- -----------
Non-current liabilities
Bank and other loans 11c) 178.6 93.4
Retirement benefit obligations 12 12.6 19.8
Deferred tax liabilities 46.9 24.8
Obligations under finance leases 1.0 0.4
Others 0.7 0.8
----------- -----------
Total non-current liabilities 239.8 139.2
-----------
Total liabilities 430.4 325.7
===========
Net assets 430.9 411.6
=========== ===========
Equity
Issued share capital 10 41.9 41.8
Share premium account 14.8 14.8
Equity reserve 4.5 5.7
Hedging and translation reserve (12.9) (7.2)
Retained earnings 384.7 359.0
Own shares (2.1) (2.5)
----------- -----------
Equity attributable to equity holders
of the parent 430.9 411.6
----------- -----------
Total equity 430.9 411.6
=========== ===========
Consolidated Statement of Changes in Equity
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February 29, 2016 02:00 ET (07:00 GMT)
For the year ended 31 December 2015 All equity is attributable
to equity holders of the parent
Hedging
Issued Share and
share premium Equity translation Retained Own Total
capital account reserve reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1 January
2014 41.6 13.8 5.2 (13.6) 316.4 (1.9) 361.5
Profit for the year
2014 - - - - 63.5 - 63.5
Losses on cash flow
hedges - - - (1.7) - - (1.7)
Exchange differences
on translation of foreign
operations - - - 7.9 - - 7.9
Actuarial losses on
defined benefit pension
schemes - - - - (0.9) - (0.9)
Tax relating to components
of other comprehensive
income - - - 0.2 0.4 - 0.6
-------- -------- -------- ------------ --------- ------- -------
Total comprehensive
income for the period - - - 6.4 63.0 - 69.4
-------- -------- -------- ------------ --------- ------- -------
Issue of share capital 0.2 1.0 (0.1) - - - 1.1
Share-based payment
charge - - 2.3 - - - 2.3
Tax relating to share-based
payments - - - - (0.1) - (0.1)
Purchase of shares
held by employee benefit
trust - - - - - (0.7) (0.7)
Use of shares held
by employee benefit
trust - - - - (0.1) 0.1 -
Transfer to retained
earnings - - (1.7) - 1.7 - -
Dividends paid - - - - (21.9) - (21.9)
-------- -------- -------- ------------ --------- ------- -------
Balance at 31 December
2014 41.8 14.8 5.7 (7.2) 359.0 (2.5) 411.6
======== ======== ======== ============ ========= ======= =======
Profit for the year
2015 - - - - 48.5 - 48.5
Losses on cash flow
hedges - - - (1.8) - - (1.8)
Exchange differences
on translation of foreign
operations - - - (4.3) - - (4.3)
Actuarial losses on
defined benefit pension
schemes - - - - (1.1) - (1.1)
Tax relating to components
of other comprehensive
income - - - 0.4 0.8 - 1.2
-------- -------- -------- ------------ --------- ------- -------
Total comprehensive
income for the period - - - (5.7) 48.2 - 42.5
-------- -------- -------- ------------ --------- ------- -------
Issue of share capital 0.1 - (0.1) - - - -
Share-based payment
charge - - 2.2 - - - 2.2
Tax relating to share-based
payments - - - - (0.2) - (0.2)
Purchase of shares
held by employee benefit
trust - - - - - (0.9) (0.9)
Use of shares held
by employee benefit
trust - - - - (1.3) 1.3 -
Transfer to retained
earnings - - (3.3) - 3.3 - -
Dividends paid - - - - (24.3) - (24.3)
-------- -------- -------- ------------ --------- ------- -------
Balance at 31 December
2015 41.9 14.8 4.5 (12.9) 384.7 (2.1) 430.9
======== ======== ======== ============ ========= ======= =======
422.1
Consolidated Cash Flow Statement
For the year ended 31 December 2015
Year ended Year ended
2015 2014
Notes GBPm GBPm
Net cash from operating activities 11a) 99.4 88.6
----------- -----------
Investing activities
Interest received 0.2 0.1
Proceeds on disposal of property,
plant and equipment 0.7 0.2
Purchases of property, plant and
equipment (46.4) (29.6)
Purchases of intangible assets (2.2) (1.5)
Acquisition of Steico 13 (60.3) -
Acquisition of LPE 13 (43.6) -
Acquisition of Upeca - (60.1)
Loan to joint venture (0.1) (1.1)
Net cash used in investing activities (151.7) (92.0)
----------- -----------
Financing activities
Dividends paid (24.3) (21.9)
Repayment of borrowings (98.2) (34.5)
Repayments of obligations under
finance leases (0.6) (1.4)
Share issues - 1.1
Purchase of shares held by employee
benefit trust (0.9) (0.7)
New loans raised 179.9 16.1
Net cash from / (used in) financing
activities 55.9 (41.3)
----------- -----------
Net increase / (decrease) in cash
and cash equivalents 3.6 (44.7)
Cash and cash equivalents at beginning
of period 8.5 53.1
Effect of foreign exchange rate
changes (0.5) 0.1
----------- -----------
Cash and cash equivalents at end
of period 11c) 11.6 8.5
=========== ===========
Notes to the above Financial Statements
For the year ended 31 December 2015
1. General information
These results for the year ended 31 December 2015 are an excerpt
from the Annual Report & Accounts 2015 and do not constitute
the Group's statutory accounts for 2015 or 2014. Statutory accounts
for 2014 have been delivered to the Registrar of Companies, and
those for 2015 will be delivered following the Company's Annual
General Meeting. The Auditor has reported on both those accounts;
their reports were unqualified, did not draw attention to any
matters by way of emphasis and did not contain statements under
Sections 498(2) or (3) of the Companies Act 2006 or equivalent
preceding legislation.
2. Significant accounting policies
Whilst the financial information included in this Annual Results
Release has been prepared in accordance with International
Financial Reporting Standards ("IFRS") adopted by the European
Union, this announcement does not itself contain sufficient
information to comply with IFRS. Full Financial Statements that
comply with IFRS are included in the Annual Report & Accounts
2015 which is available at www.seniorplc.com, hard copies of which
will be distributed on or soon after 11 March 2016.
During the year, no new accounting standards or amendments to
existing standards became effective which had a material impact on
the Group's Financial Statements. At the date of authorisation of
the Group's Financial Statements, a number of new standards and
amendments to existing standards have been issued but are not yet
effective and, in some cases, have not yet been endorsed by the EU.
They have not been adopted early in the Group's Financial
Statements. Management is in the process of reviewing the impact of
the following new standards:
- IFRS 9 Financial instruments. Effective for annual periods
beginning 1 January 2018, subject to EU endorsement.
- IFRS 15 Revenue from Contracts with Customers. Effective for
annual periods beginning 1 January 2018, subject to EU
endorsement.
- IFRS 16 Leases. Effective for annual periods beginning 1
January 2019, subject to EU endorsement.
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None of the amendments to existing standards are expected to
have a significant impact on the Financial Statements when they are
adopted.
3. Segment information
The Group reports its segment information as two operating
Divisions according to the market segments they serve, Aerospace
and Flexonics. For management purposes, the Aerospace Division is
managed as two sub-divisions, Aerostructures and Fluid Systems, in
order to enhance management oversight; however, these are
aggregated as one reporting segment as they service similar markets
and customers in accordance with IFRS 8. The Flexonics Division is
managed as a single division.
Segment information for revenue, operating profit and a
reconciliation to entity net profit is presented below:
Elimination Elimination
/ central / central
Aerospace Flexonics costs Total Aerospace Flexonics costs Total
Year Year Year Year Year Year Year Year
ended ended ended ended ended ended ended ended
2015 2015 2015 2015 2014 2014 2014 2014
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
External revenue 574.9 274.6 - 849.5 536.5 284.3 - 820.8
Inter-segment
revenue 0.1 0.3 (0.4) - 0.1 0.3 (0.4) -
---------- ---------- ------------ ------- ---------- ---------- ------------ -------
Total revenue 575.0 274.9 (0.4) 849.5 536.6 284.6 (0.4) 820.8
========== ========== ============ ======= ========== ========== ============ =======
Adjusted trading
profit 76.8 39.4 (8.8) 107.4 77.9 43.5 (9.5) 111.9
Share of joint
venture profit
/(loss) - 0.4 - 0.4 - (0.3) - (0.3)
---------- ---------- ------------ ------- ---------- ---------- ------------ -------
Adjusted operating
profit 76.8 39.8 (8.8) 107.8 77.9 43.2 (9.5) 111.6
Exceptional
pension charge - - - - - - (1.5) (1.5)
Loss on sale
and write-down
of fixed assets (1.1) (0.4) - (1.5) - - - -
Goodwill impairment - (18.8) - (18.8) (9.4) - - (9.4)
Restructuring
costs - - - - (1.5) - - (1.5)
Amortisation
of intangible
assets from
acquisitions (5.3) (6.9) - (12.2) (4.8) (2.4) - (7.2)
Impairment
of assets
held for sale (1.8) - - (1.8) - - - -
Write-down
of L85 inventory - - - - (1.8) - - (1.8)
Acquisition
costs (0.4) (0.8) - (1.2) (0.3) (0.3) - (0.6)
---------- ---------- ------------ ------- ---------- ---------- ------------ -------
Operating
profit 68.2 12.9 (8.8) 72.3 60.1 40.5 (11.0) 89.6
========== ========== ============ ======= ========== ========== ============ =======
Investment
income 0.3 0.1
Finance costs (8.8) (9.1)
------- -------
Profit before
tax 63.8 80.6
Tax (15.3) (17.1)
------- -------
Profit after tax 48.5 63.5
======= =======
Adjusted operating
profit (Note 4) 107.8 111.6
======= =======
Segment information for assets and liabilities is presented
below:
Assets Year ended Year ended
2015 2014
GBPm GBPm
Aerospace 346.6 293.0
Flexonics 128.9 130.7
Corporate 4.4 3.0
----------- -----------
Segment assets for reportable segments 479.9 426.7
Unallocated
Goodwill 284.5 262.5
Intangible customer relationships 67.9 25.1
Cash 14.4 13.2
Deferred and current tax 11.8 7.1
Others 2.8 2.7
----------- -----------
Total assets per balance sheet 861.3 737.3
=========== ===========
Liabilities Year ended Year ended
2015 2014
GBPm GBPm
Aerospace 91.3 84.7
Flexonics 37.8 51.2
Corporate 9.4 11.2
----------- -----------
Segment liabilities for reportable segments 138.5 147.1
Unallocated
Debt 207.2 117.5
Finance leases 1.8 0.7
Deferred and current tax 67.4 38.1
Retirement benefit obligations 12.6 19.8
Others 2.9 2.5
----------- -----------
Total liabilities per balance sheet 430.4 325.7
=========== ===========
4. Adjusted operating profit and adjusted profit before tax
The provision of adjusted operating profit and adjusted profit
before tax measures, derived in accordance with the table below,
has been included to identify the performance of the Group prior to
the impact of goodwill impairment, impairment of assets held for
sale, write-down of L85 inventory, restructuring costs,
amortisation of intangible assets acquired from acquisitions,
acquisition costs, loss on sale and write-down of fixed assets and
exceptional pension charge. These items have been excluded from the
adjusted measures in order to show the underlying current business
performance of the Group in a consistent manner. This also reflects
how the business is managed on a day-to-day basis.
Year ended Year ended
2015 2014
GBPm GBPm
Operating profit 72.3 89.6
----------- -----------
Goodwill impairment 18.8 9.4
Impairment of assets held for sale 1.8 -
Write-down of L85 inventory - 1.8
Restructuring costs - 1.5
Amortisation of intangible assets from acquisitions 12.2 7.2
Acquisition costs 1.2 0.6
Loss on sale and write-down of fixed assets 1.5 -
Exceptional pension charge - 1.5
Adjustments to operating profit 35.5 22.0
----------- -----------
Adjusted operating profit 107.8 111.6
=========== ===========
Profit before tax 63.8 80.6
----------- -----------
Adjustments to profit as above before tax 35.5 22.0
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Adjusted profit before tax 99.3 102.6
=========== ===========
5. Taxation
Year ended Year ended
2015 2014
GBPm GBPm
Current tax:
Current year 11.3 12.4
Adjustments in respect of prior periods (1.0) (0.5)
----------- -----------
10.3 11.9
----------- -----------
Deferred tax:
Current year 5.4 6.2
Adjustments in respect of prior periods (0.4) (1.0)
----------- -----------
5.0 5.2
----------- -----------
15.3 17.1
=========== ===========
UK Corporation Tax is calculated at an effective rate of 20.25%
(2014 - 21.5%) of the estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
6. Dividends
Year ended Year ended
2015 2014
GBPm GBPm
Amounts recognised as distributions to equity
holders in the period:
Final dividend for the year ended 31 December
2014 of 3.96p (2013 - 3.60p) per share 16.6 15.0
Interim dividend for the year ended 31 December
2015 of 1.84p (2014 - 1.67p) per share 7.7 6.9
----------- -----------
24.3 21.9
=========== ===========
Proposed final dividend for the year ended 31
December 2015
of 4.36p (2014 - 3.96p) per share 18.3 16.6
=========== ===========
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting 2016 and has not been
included as a liability in the Financial Statements.
7. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Number of shares Year ended Year ended
2015 2014
million million
Weighted average number of ordinary shares for
the purposes of basic earnings per share 418.3 416.3
Effect of dilutive potential ordinary shares:
Share options 4.4 5.3
----------- -----------
Weighted average number of ordinary shares for
the purposes of diluted earnings per share 422.7 421.6
=========== ===========
Year ended 2015 Year ended 2014
Earnings and earnings per share Earnings EPS Earnings EPS
GBPm pence GBPm pence
Profit for the period 48.5 11.59 63.5 15.25
Adjust:
Amortisation of intangible
assets from acquisitions net
of tax of GBP2.2m (2014 - GBP1.3m) 10.0 2.39 5.9 1.42
Acquisition costs net of tax
of GBP0.1m (2014 - GBPnil) 1.1 0.27 0.6 0.14
Goodwill impairment net of
tax of GBP1.0m (2014 - GBPnil) 17.8 4.25 9.4 2.26
Exceptional pension charge
net of tax of GBPnil (2014
- GBP0.3m) - - 1.2 0.29
Loss on sale and write-down
of fixed assets net of tax
of GBP0.6m (2014 - GBPnil) 0.9 0.22 - -
Impairment of assets held for
sale net of tax of GBP0.7m
(2014 - GBPnil) 1.1 0.26 - -
Write-down of L85 inventory
net of tax of GBPnil (2014
- GBP0.7m) - - 1.1 0.26
Restructuring costs net of
tax of GBPnil (2014 - GBP0.6m) - - 0.9 0.22
Adjusted earnings after tax 79.4 18.98 82.6 19.84
========= ======= ========= =======
Earnings per share
* basic 11.59p 15.25p
* diluted 11.47p 15.06p
* adjusted 18.98p 19.84p
* adjusted and diluted 18.78p 19.59p
The effect of dilutive shares on the earnings for the purposes
of diluted earnings per share is GBPnil (2014 - GBPnil).
The denominators used for all basic, diluted and adjusted
earnings per share are as detailed in the "Number of shares" table
above.
The provision of an adjusted earnings per share, derived in
accordance with the table above, has been included to identify the
performance of the Group prior to the impact of goodwill
impairment, impairment of assets held for sale, write-down of L85
inventory, restructuring costs, amortisation of intangible assets
acquired from acquisitions, acquisition costs, loss on sale and
write-down of fixed assets and exceptional pension charges. These
items have been excluded from the adjusted measures in order to
show the underlying current business performance of the Group in a
consistent manner. This also reflects how the business is managed
on a day-to-day basis.
8. Goodwill
Goodwill increased by GBP22.0m during the year to GBP284.5m
(2014 - GBP262.5m) due to goodwill arising on the acquisitions of
LPE of GBP17.1m and Steico of GBP21.2m (see note 13), the
impairment of goodwill relating to the GA Cash Generating Unit of
GBP18.8m and exchange translation differences of GBP2.5m.
9. Property, plant and equipment
During the period, the Group spent GBP46.4m (2014 - GBP29.6m) on
the acquisition of property, plant and equipment. The Group also
disposed of property, plant and equipment with a carrying value of
GBP2.2m (2014 - GBP0.2m) for proceeds of GBP0.7m (2014 -
GBP0.2m).
10. Share capital
Share capital as at 31 December 2015 amounted to GBP41.9m.
During 2015, the Group issued 3,952 shares at an average price of
244.4 per share under share option plans. 1,332,508 shares were
also issued during 2015 under the Senior plc 2005 Long-Term
Incentive Plan.
11. Notes to the cash flow statement
a) Reconciliation of operating profit to net cash from operating
activities
Year ended Year ended
2015 2014
GBPm GBPm
Operating profit 72.3 89.6
Adjustments for:
Depreciation of property, plant and equipment 26.5 24.1
Amortisation of intangible assets 13.5 8.0
Loss on sale and write-down of fixed assets 1.5 -
Goodwill impairment 18.8 9.4
Impairment of assets held for sale 1.8 -
Restructuring costs - 1.5
Share options 2.3 2.5
Pension payments in excess of service cost (8.8) (9.1)
Share of joint venture (0.4) 0.3
Exceptional pension charge - 1.5
----------- -----------
Operating cash flows before movements in working
capital 127.5 127.8
Decrease/(increase) in inventories 3.6 (11.5)
Decrease/(increase) in receivables 5.3 (13.6)
(Decrease)/increase in payables (20.9) 8.6
Working capital currency movements (0.1) (1.5)
----------- -----------
Cash generated by operations 115.4 109.8
Income taxes paid (7.9) (12.7)
Interest paid (8.1) (8.5)
----------- -----------
Net cash from operating activities 99.4 88.6
=========== ===========
b) Free cash flow
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Free cash flow, a non-statutory item, highlights the total net
cash generated by the Group prior to corporate activity such as
acquisitions, disposals, financing and transactions with
shareholders. It is derived as follows:
Year ended Year ended
2015 2014
GBPm GBPm
Net cash from operating activities 99.4 88.6
Interest received 0.2 0.1
Proceeds on disposal of property, plant and
equipment 0.7 0.2
Purchases of property, plant and equipment (46.4) (29.6)
Purchases of intangible assets (2.2) (1.5)
----------- -----------
Free cash flow 51.7 57.8
=========== ===========
c) Analysis of net debt
At Assumed At
1 Jan on Exchange 31 Dec
2015 Cash flow acquisition movement 2015
GBPm GBPm GBPm GBPm GBPm
Cash 13.2 1.9 - (0.7) 14.4
Overdrafts (4.7) 1.7 - 0.2 (2.8)
-------- ---------- ------------- --------- --------
Cash and cash equivalents 8.5 3.6 - (0.5) 11.6
Debt due within
one year (19.4) (6.3) - (0.1) (25.8)
Debt due after one
year (93.4) (75.4) (1.9) (7.9) (178.6)
Finance leases (0.7) 0.6 (1.8) 0.1 (1.8)
Total (105.0) (77.5) (3.7) (8.4) (194.6)
======== ========== ============= ========= ========
Year ended Year ended
2015 2014
GBPm GBPm
Cash and cash equivalents comprise:
Cash 14.4 13.2
Bank overdrafts (2.8) (4.7)
----------- -----------
Total 11.6 8.5
=========== ===========
Cash and cash equivalents (which are presented as a single class
of assets on the face of the Balance Sheet) comprise cash at bank
and other short-term highly liquid investments with a maturity of
three months or less. The Directors consider that the carrying
amount of cash and cash equivalents approximates to their fair
value.
12. Retirement benefit schemes
Defined Benefit Schemes
Aggregate retirement benefit liabilities are GBP12.6m (2014 -
GBP19.8m). The primary components of this liability are the Group's
UK and US defined benefit pension schemes, with deficits of GBP0.6m
(2014 - GBP9.4m) and GBP6.5m (2014 - GBP4.7m) respectively, and a
liability on unfunded schemes of GBP5.5m (2014 - GBP5.7m). These
values have been assessed by independent actuaries using current
market values and discount rates. The decrease in the liability
from GBP19.8m at 31 December 2014 to GBP12.6m at 31 December 2015
is principally due to the positive impact of GBP8.8m cash
contributions in excess of service costs, a decrease in the
inflation assumptions and an increase in the discount rate,
partially offset by lower asset returns during the year.
13. Acquisitions
Lymington Precision Engineering (LPE) Limited
On 31 March 2015, the Group acquired 100% of the issued share
capital of Lymington Precision Engineering (LPE) Limited, and its
100%-owned subsidiary Lymington Precision Engineers Co. Limited
(collectively "LPE") through a business combination. LPE is based
in Lymington, Hampshire, UK and manufactures precision-machined
components, fabrications, assemblies and kit sets for the oil and
gas, telecommunications, aerospace, defence, land and sea systems,
nuclear and marine industries. LPE strengthens the Group's
precision machining capabilities and provides access to LPE's
strong customer relationships and adjacent markets.
The consideration was GBP44.6m comprising a net consideration of
GBP45.8m after taking account of GBP2.7m of net debt in the
business at acquisition date and a payment of GBP1.5m for working
capital. The acquisition was funded using the Group's existing
borrowing facilities, a new two-year GBP20.0m revolving credit
facility and new one-year term loans totalling GBP25.0m.
Set out below is a provisional summary of the net assets
acquired:
Recognised amounts of identified assets acquired and liabilities
assumed GBPm
------------------------------------------------------------------ ------
Identifiable intangible assets 27.9
Property, plant and equipment 5.0
Inventories 4.5
Financial assets, excluding cash and cash equivalents 6.2
Cash and cash equivalents 1.0
Financial liabilities, excluding borrowings (7.7)
Borrowings (3.7)
Deferred tax liability (5.7)
------------------------------------------------------------------ ------
Net assets acquired 27.5
Goodwill 17.1
------------------------------------------------------------------ ------
Total consideration 44.6
------------------------------------------------------------------ ------
Consideration satisfied by:
Cash paid 44.6
------
Total consideration 44.6
------------------------------------------------------------------ ------
Net cash outflow arising on acquisition:
Cash consideration 44.6
Less: cash and cash equivalents acquired (1.0)
------------------------------------------------------------------ ------
Net cash outflow arising on acquisition 43.6
------------------------------------------------------------------ ------
The goodwill of GBP17.1m represents the premium paid in
anticipation of future profitability from assets that are not
capable of being separately identified and separately recognised
such as the assembled workforce as well as the expectation that the
Group will be able to leverage its wider market access and strong
financial position to generate sustainable financial growth beyond
what LPE would have potentially achieved as a stand-alone company.
None of the goodwill is expected to be deductible for tax
purposes.
The intangible assets acquired as part of the acquisition relate
mainly to customer contracts and relationships, the fair value of
which is dependent on estimates of attributable future revenues,
profitability and cash flows, and are being amortised over five
years. Fair value has also been assigned to the order book and
trade name which are both being amortised over five years.
The financial assets acquired include trade receivables with a
provisional fair value of GBP5.8m and a gross contractual value of
GBP5.8m, all of which is currently expected to be collectible.
Acquisition-related costs of GBP0.9m are included in
administrative expenses within trading profit in the Group's
Consolidated Income Statement for the year ended 31 December
2015.
The fair value of the acquired identifiable assets and
liabilities is provisional pending finalisation of the fair value
exercise.
From the date of acquisition to 31 December 2015, LPE
contributed GBP16.9m of external revenue and GBP0.8m to the Group's
operating profit before amortisation of intangible assets from the
acquisition of GBP4.2m. If the acquisition had been completed on 1
January 2015, Group revenue for the year ended 31 December 2015
would have been GBP862.9m, Group adjusted operating profit would
have been GBP109.8m and Group operating profit would have been
GBP72.9m.
Steico Industries, Inc.
On 17 December 2015, the Group acquired 100% of the issued share
capital of Steico Industries, Inc. and its trading facilities
(collectively "Steico") through a business combination. Steico is a
leading manufacturer of precision tube and duct assemblies for the
commercial and defence aerospace industries, located in Oceanside,
California, USA. Steico brings new and adjacent capabilities to the
Group and enables Senior's Aerospace Fluid Systems Division to
offer the full range of tube and duct assemblies covering a wider
scope of aerospace fluid systems.
The consideration was GBP50.2m, after taking account of GBP0.1m
working capital adjustment, for the issued share capital and
GBP10.1m for the trading facility. There is no contingent
consideration related to the acquisition. The acquisition was
funded using the Group's existing borrowing facilities and $80.0m
private placements.
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