Analysts slashed their full-year forecasts for Senior last week after the company alerted the market to a second-half slowdown in its specialist industrial division.
The company, which has dropped the `engineering’ tag from its group name, said it was not the only one to be experiencing a slowdown in mainland Europe.
Chief executive Andrew Parrish said pricing pressures and reduced levels of demand had begun to hurt the company. `One of our major German competitors reported a 20% drop in the first half.’ Remedial action is likely to see Senior sell the German part of its Air Systems business during the next year.
Parrish disclosed that Senior is looking for extra UK aerospace manufacturing capability to increase its parts sales to Airbus. The average value of products from its existing aerospace division, Flexonics, used in Airbus aircraft is a lot less than those used in Boeing airliners because of Senior’s lack of European manufacturing strength.
Parrish said the group’s activities had become unbalanced by being `overfocused on North America’. He said he hoped to fill the gap as soon as possible and has up to £100m to spend.
He added that the need for extra UK manufacturing was highlighted by the fact that it supplies Rolls-Royce in Derby from a subsidiary in California.
Interim results for Senior were in line with a June trading statement, though analysts expressed disappointment in the company’s cautious outlook.
Profits before goodwill, relocation and exceptional charges came in at £20.7m – down from £24.4m last year.
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