Senior chief supports ‘fantastic’ Dreamliner

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The chief executive of Senior, the UK-listed engineering group, has expressed confidence in the future of Boeing’s 787 Dreamliner, in the wake of the passenger jet’s recent run of safety concerns.

The FTSE 250 company – a specialist in aerospace and automotive components – provides structural aluminium for the body of the Dreamliner and parts for the aircraft’s Trent engines, in contracts worth $800,000 per jet.

Mark Rollins, Senior’s chief executive, on Monday lent his backing to the Boeing aircraft and said that safety concerns following this month’s fire in a Dreamliner at London’s Heathrow airport would not adversely affect the jet’s prospects.

“The Dreamliner is a fantastic aircraft that does what it was designed to do – fly more economically. The customers love it, and the passengers love it,” he said.

Mr Rollins said that London-based Senior was preparing to ramp up its manufacture of components for the 787, as production of the Dreamliner increases from seven to 10 aircraft per month by the end of the year.

UK investigators said there was no evidence that the July 12 fire on an Ethiopian Airlines jet was caused by the Dreamliner’s lithium-ion batteries, which overheated on two 787s in January, prompting regulators to temporarily ground the aircraft.

On Monday, Senior reported a 6 per cent year-on-year rise in its interim revenues to £399.3m, bolstered by last year’s acquisitions of US component maker Damar and Weston EU, a producer of turbine blades for aero-engines.

Senior’s aerospace arm, which manufactures aircraft parts such as wing components, air conditioning ducts and fluid pipes, earns two-thirds of the company’s total revenues, benefiting from the boom in civil aviation.

This has offset a 6.1 per cent year-on-year decline in first-half revenues from makers of military aircraft, with cuts to government armed forces budgets leading to lower demand for Black Hawk helicopters and the Lockheed C-130 Hercules military transport, both of which contain Senior’s components.

Senior shares – up almost one-third over the past 12 months – fell back 4 per cent to 261.5p, valuing the company’s equity at £1.1bn.

Pre-tax profit for the half year to June 30 fell back 14 per cent, weighed down by a £12.9m one-off writedown in goodwill stemming from its 2008 acquisition of Capo Industries, a maker of parts for business aircraft.

On an underlying basis, adjusted pre-tax profit rose 5 per cent to £53.3m.

At Senior’s other unit, Flexonics, a maker of high-tech parts for passenger car and truck engines, revenues rose 18 per cent to £145.6m, buoyed by its November acquisition of GAMFG Precision, a US-based manufacturer of machined components for diesel engines.

Diluted earnings per share edged up from 7.89p to 7.93p, and an interim dividend of 1.52p was 10 per cent higher than the 1.38p from a year ago.

Mark Wembridge

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