Boeing Senior supplier resumes dividend as airline boom boosts profits

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  • Shares up 1.2%
  • Co will pay an interim dividend of 30 pence by November.
  • HY adj pre-tax profit rises 577% to £8.8m

Aug 1 (Reuters) – British auto and aircraft parts supplier Senior Plc (SNR.L) resumed paying dividends on Monday after a more than six-fold increase in adjusted first-half profit as aircraft manufacturers ramp up production to serve post-pandemic recovery in air travel.

Turnover rose 16% to 402.2 million pounds ($489.80 million) in the six months to June 30, with adjusted profit before tax reaching 8.8 million pounds.

The company met its full-year guidance, reflecting increased production of narrow-body aircraft, US defense demand and a resumption of production of wide-body aircraft for long-haul routes expected towards the end of the year.

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“We will see stronger growth in 2023,” group chief executive David Squires told Reuters, adding that second-half performance will be in line with first-half performance.

Boeing (BA.N) is resuming deliveries of its 787 Dreamliner should also drive growth, Squires said, as aircraft manufacturers also replace older models with more fuel-efficient ones.

An interim dividend of 30 pence per share will be the first paid by the company since it scrapped payments in March 2020, already reeling from the fallout from the Boeing 737 MAX crisis as the pandemic wiped out travel global airlines.

The company, which supplies parts such as airframes and engine mounting tubes to aircraft manufacturers, also counts Airbus (AIR.PA) among its customers.

Major aerospace companies have sounded the alarm on their supply chains with shortages of raw materials and components that are undermining the industry’s ability to capitalize on growing travel demand.

Senior, who depends on the industry for 40% of its income, said pre-tax profit fell to £11.1m in the first half from £22.3m a year earlier, hurt by the rise inflation and chip supply constraints in the automotive industry.

Squires said, however, that signs of easing supply chain pressures for automakers were welcome news.

“The group has significant upside potential and growth opportunities in both divisions are attractive,” Jefferies analysts said.

($1 = 0.8212 pounds)

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Reporting by Eva Mathews in Bengaluru; edited by Uttaresh.V, Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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