19th Nov 2015 08:11
LONDON (Alliance News) - Mid-cap engineer Senior PLC on Thursday said its adjusted pretax profit is set to come in at the low-end of market expectations due to the challenging market conditions it has faced, and said it has struck a USD90.0 million deal to acquire Steico Industries Inc in the US.
FTSE 250-listed Senior said the large commercial aircraft portion of its aerospace business has performed well in the second half of 2015 so far, but this has been offset by reducing levels of activity for regional and business jets and for commercial helicopter markets. Margins in the aerospace arm have been hit by costs associated with the group having to meet customer schedules and declines in income from machined waste aluminium.
For its Flexonics arm, which makes expansion joints, flexible metal and teflon hoses and cryogenic equipment for pressure and piping systems, growth in heavy truck production in North America has slowed in the second half, while demand for agricultural and mining vehicles is still weak. Industrial markets too, particularly oil and gas, have worsened, compounded by sector-wide destocking.
As a result of the tough conditions, Senior expects its 2015 adjusted pretax profit to come in at the low end of market expectations.
Separately, Senior said it will pay a total of USD90.0 million to acquire Steico Industries and the target's trading facilities. Steico makes precision tube and duct assemblies for commercial and defence aerospace clients and is based in California.
Senior said the deal will bring a new capability to its portfolio and will boost the offering from its Aerospace Fluid Systems division.
Shares in Senior were up 1.0% at 234.90 pence in early trade Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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