Senior, the UK-listed engineering group that specialises in aerospace and automotive components, shrugged off concerns over weaker macroeconomic conditions, insisting it was set to benefit from continued growth in its main markets during the second half of the year.

Mark Rollins, chief executive, said on Monday that improving build rates in large commercial and military aircraft programmes had helped push demand levels for Senior’s products slightly ahead of expectations during the six months to June 30.

The company was set to benefit during the second half from initial deliveries of the Boeing 787 aircraft during the third quarter of this year, while both Airbus and Boeing were poised toaccelerate production across other programmes, he said.

Senior estimates that the value of the parts it supplies for the 787 will increase from $750,000 to $870,000 per aircraft, following the acquisition of Damar Machine Company of the US earlier this year. Mr Rollins predicts it can secure $100m a year of sales per year from the project by 2014.

An improvement in demand for medium and heavy trucks in both North America and Europe, following slumps in demand caused by the manufacturing downturn of 2009, also more than offset a slowdown in sales of passenger vehicles among Senior’s automotive customer base, which includes Ford, Renault and Peugeot SA. Improved automotive revenues in the US, Brazil and India helped ameliorate a 7 per cent decline in car sales in Europe.

The company generates about 60 per cent of turnover from the civilian and military aircraft sector, with the remainder accounted for by automotive and general industrial customers. Although the company admits cutbacks by western government threaten overall military spending, it argues committed spending on the Black Hawk helicopter and C-130J transport aircraft provides some resilience for group revenues.

Mr Rollins said Senior was relatively immune from any “hiccup” in demand in the domestic US economy as much of its US business activity served broader international aviation markets. However, he conceded that any weakening of the dollar presented some risk to profits.

Revenues at Senior, which has manufacturing plants in 11 countries, rose 10 per cent from £288m to £316m as pre-tax profits advanced 18 per cent from £30.2m to £35.6m. An improved interim dividend of 1.15p (1p), payable from earnings per share of 6.65p (5.59p), reflected an “encouraging” outlook for Senior into the second half and beyond, said chairman Martin Clark, despite wider economic uncertainty.

Net debt fell £24m to £63m compared with a year ago.

Shares in the company closed steady at 185.8p, maintaining the gains made since a profits upgrade in June prompted an increase in price that had been trading in the 155p to 160p range since April.

Broker RBS described the interim results on Monday as “nicely ahead of our forecasts” arguing that although it expected no change to its own full-year profits forecast of £69.5m, up from £60.7m last year, “momentum continues to trend positive”. RBS expects profits of £82.6m in 2013 on a continued cyclical recovery in the aerospace and heavy automotive sectors.

Brewin Dolphin, meanwhile, edged up its target price for Senior and upgraded its recommendation from “add” to “buy”, arguing the company’s medium-term outlook was “as strong as it has ever been”.

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