REG - Senior PLC - 2024 Annual Results
03/03/2025 07:15
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RNS Number : 9776Y Senior PLC 03 March 2025
Results for the year ended 31 December 2024
Trading in line with revised expectations, strong cash performance
FINANCIAL HIGHLIGHTS Year ended 31 December change change (4)
2024 2023 (constant
currency)
REVENUE £977.1m £963.5m +1% +4%
OPERATING PROFIT £40.3m £37.9m +6% +10%
ADJUSTED OPERATING PROFIT ((1)) £46.5m £45.8m +2% +5%
ADJUSTED OPERATING MARGIN ((1)) 4.8% 4.8% nil bps +10 bps
PROFIT BEFORE TAX £27.8m £22.8m +22% +27%
ADJUSTED PROFIT BEFORE TAX ((1)) £33.0m £38.3m -14% -11%
BASIC EARNINGS PER SHARE 6.25p 7.52p -17%
ADJUSTED EARNINGS PER SHARE ((1)) 7.17p 10.28p -30%
TOTAL DIVIDEND (PAID AND PROPOSED) PER SHARE 2.40p 2.30p +4%
FREE CASH FLOW ((2)) £17.3m £15.5m +12%
NET DEBT EXCLUDING CAPITALISED LEASES ((2)) £153.4m £132.0m £21m
increase
ROCE ((3)) 6.8% 7.1% -30bps
Highlights
● Group sales up 4%((4)) and adjusted operating profit up 5%((4)) yoy
● Group free cash flow of £17.3m, up 12%
● Book-to-bill 1.12 underpinning confidence in future growth
● Notable contract wins in both Aerospace and Flexonics divisions
● Spencer sales have grown over 135% in the two years since acquisition
● Sale process of Aerostructures at an advanced stage
● The Board anticipates good growth for the Group in 2025 in line with its
expectations
● Final dividend of 1.65p, bringing full year dividend to 2.40p, up 4%,
reflecting trading performance and future prospects
Commenting on the results, David Squires, Group Chief Executive Officer of
Senior plc, said:
"We are committed to a sale of our Aerostructures business and are making good
progress. There is good buyer interest, we are now at an advanced stage of a
sale process with a small number of parties, and negotiations are progressing
positively. We are focused on completing the sale process and maximising
value for shareholders and will update the market in due course. This is in
line with our strategy to position Senior as the leading pure play fluid
conveyance and thermal management business.
For 2024, Senior delivered results in line with revised expectations, enhanced
by a strong cash performance.
Our Aerospace revenue and profits have grown, notwithstanding the
well-documented situation at Boeing, which affected production volumes. We
responded dynamically, supporting our customers and controlling our costs, to
limit the impact on Aerospace profitability in 2024.
In Flexonics, we continued to outperform land vehicle markets and delivered
double-digit margins, albeit revenues and profits were slightly lower than
2024 as anticipated.
For the year ahead, the Board anticipates good growth for the Group, in line
with its expectations.
Increasing aircraft build rates, operational efficiency benefits and improved
contract pricing are expected to drive good growth in Aerospace in 2025, with
H2 performance expected to be higher than H1.
For the full year, Aerostructures is expected to improve from a loss making
position in 2024 to an operating profit range of £9m to £11m in 2025, with
the large majority of that being earned in H2.
We expect Flexonics performance in 2025 to be broadly similar to 2024. In
land vehicles, the ramp up of programmes recently won means we expect our 2025
performance to be broadly similar to 2024, despite some softness in North
America and Germany. In power and energy, activity levels are expected to be
similar to 2024.
Looking ahead, our strategy of positioning Senior as a pure play fluid
conveyance and thermal management business in attractive and structurally
resilient core markets; active portfolio management; combined with our highly
relevant technical capabilities; and sector-leading sustainability
credentials, provides confidence of continuing performance improvements for
the Group. We have today announced new and improved medium term financial
targets which will deliver strong value creation for all of our
stakeholders.((5))
Reflecting the Group's performance and the Board's confidence in its future
prospects, the Board has approved a final dividend of 1.65 pence per share,
bringing full year dividend to 2.40 pence per share, an increase of 4%
compared to 2024."
Further information
Bindi Foyle, Group Finance Director, Senior plc +44 (0) 1923 714 725
Gulshen Patel, Director of Investor Relations and Corporate Communication, +44 (0) 1923 714 722
Senior plc
Richard Webster-Smith, FGS Global +44 (0) 7796 708 551
Webcast
For the Full Year Results 2024, there will be a presentation on Monday 3 March
2024 at 9.00am GMT.
Investor Event
Following the Full Year Results presentation, Senior will be holding an
Investor Event from 10.00 am to 11.45 am GMT. This will focus on delivery of
strategy, the prospects for Senior as a pure play fluid conveyance and thermal
management ("FCTM") business, and will outline new and improved medium term
financial targets for the FCTM business. Both events will be accessible via
a live webcast on Senior's website at www.seniorplc.com/investors
(http://www.seniorplc.com/investors) and the webcasts for both events will be
made available on the website for subsequent viewing.
Notes
This Release represents the Company's dissemination announcement in accordance
with the requirements of Rule 6.3.5 of the Disclosure and Transparency Rules
of the United Kingdom's Financial Services Authority. The full Annual Report
& Accounts 2024 will be made available online at www.seniorplc.com
(http://www.seniorplc.com) on 3 March 2025. Printed copies will be made
available on or soon after 14 March 2025. Other information on Senior plc,
can be found at: www.seniorplc.com (http://www.seniorplc.com)
The information contained in this Release is an extract from the Annual Report
& Accounts 2024, however, some references to Notes and page numbers have
been amended to reflect Notes and page numbers appropriate to this Release.
The Directors' Responsibility Statement has been prepared in connection with
the full Financial Statements and Directors' Report as included in the Annual
Report & Accounts 2024. Therefore, certain Notes and parts of the
Directors' Report reported on are not included within this Release.
(1) Adjusted operating profit and adjusted profit before tax are stated before
£1.6m amortisation of intangible assets from acquisitions (2023 - £2.2m),
£3.5m site relocation costs (2023 - £0.1m), £1.1m US class action lawsuit
(2023 - £nil) and £nil net restructuring costs (2023 - £5.6m). Adjusted
profit before tax is also stated before net income associated with corporate
undertakings of £1.0m (2023 - £7.6m costs). A reconciliation of adjusted
operating profit to operating profit is shown in Note 4. In 2023, adjusted
earnings per share includes the benefit of a release of £10.5m of provisions
for uncertain tax positions, of which £3.5m relates to interest (see Note 5
for further details). Adjusted operating margin is the ratio of adjusted
operating profit to revenue.
(2) See Note 12b and 12c for derivation of free cash flow and of net debt,
respectively.
(3) Return on capital employed ("ROCE") is derived from annual adjusted operating
profit (as defined in Note 4) divided by the average of the capital employed
at the start and end of that twelve-month period, capital employed being total
equity plus net debt (as derived in Note 12c).
(4) 2023 results translated using 2024 average exchange rates - constant currency.
(5) The details of the new medium-term financial targets are set out in the
separate RNS announcement published this morning and will be discussed in
detail at the Investor Event presentation to be held today at 10.00 GMT.
The following measures are used for the purpose of assessing covenant
compliance for the Group's borrowing facilities:
● EBITDA is adjusted profit before tax and before interest, depreciation,
amortisation and profit or loss on sale of property, plant and equipment. It
also excludes EBITDA from businesses which have been disposed and includes 12
months EBITDA for businesses acquired and it is based on frozen GAAP (pre-IFRS
16). EBITDA for 2024 was £84.1m.
● Net debt is defined in Note 12c. It is based on frozen GAAP (pre-IFRS 16)
and as required by the covenant definition, it is restated using 12-month
average exchange rates.
● Interest is adjusted finance costs and finance income before net finance
income of retirement benefits. It also excludes interest from businesses
which have been disposed and it is based on frozen GAAP (pre-IFRS 16).
● The definition of adjusted items in the Consolidated Income Statement is
included in Note 4.
The Group's principal exchange rate for the US Dollar applied in the
translation of the Income Statement and cash flow items at average 2024 rates
was $1.28 (2023 - $1.24) and applied in the translation of balance sheet items
at 31 December 2024 was $1.25 (31 December 2023 - $1.27).
Note to Editors
Senior is a FTSE 250 international manufacturing Group with operations in 12
countries. It is listed on the main market of the London Stock Exchange
(symbol SNR). Senior's Purpose is "we help engineer the transition to a
sustainable world for the benefit of all our stakeholders." Senior designs
and manufactures high technology components and systems for the principal
original equipment producers in the worldwide aerospace & defence, land
vehicle and power & energy markets.
Cautionary Statement
This Release contains certain forward-looking statements. Such statements
are made by the Directors in good faith based on the information available to
them at the time of their approval of this Release and they should be treated
with caution due to the inherent uncertainties, including both economic and
business risk factors, underlying any such forward-looking information.
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
Overview of 2024 results
Senior delivered 2024 results in line with revised expectations, enhanced by a
strong cash performance.
A book-to-bill ratio of 1.12 reflected strong order intake in 2024,
underpinning the Group's confidence in continued growth in 2025 and beyond.
Both our divisions recorded good order intake, with some notable contract wins
including from Safran, Deutsche Aircraft GmbH, Gail India Limited and land
vehicle OEMs (details in the divisional reviews below), showcasing the broad,
diversified and high-quality nature of our business.
During 2024, Group revenue increased by 4% on a constant currency basis to
£977.1m, with growth in the Aerospace Division and lower sales in the
Flexonics Division as expected. Exchange rates had an adverse impact of
£25.5m to total sales.
In Aerospace, revenue increased 10% year-on-year on a constant currency
basis. The increase reflected improved pricing, the ramp up in civil
aircraft production rates and very strong growth of over 50% in Spencer
Aerospace. This was despite 737 MAX volumes being subdued throughout the
year following the Alaska Airlines incident in January 2024 and the Boeing
employee strike from September to November 2024. We saw a return to growth
in sales to semiconductor equipment customers (which is included in "Adjacent
Markets") and steady growth in the defence market. In Flexonics, revenue was
in line with expectations, down 6% compared to prior year, on a constant
currency basis. The Group saw robust demand in our downstream oil and gas
and nuclear business, partially offsetting a reduction in sales from one of
our operating businesses to our upstream oil and gas customers due to a lower
share of this very competitive market sector. Global land vehicle markets
softened as expected in 2024, however, our sales outperformed key end markets
due to the ramp up of recently won production contracts.
We measure Group performance on an adjusted basis, which excludes items that
do not directly reflect the underlying trading performance in the period (see
Note 4). References below therefore focus on these adjusted measures.
The Group's adjusted operating profit increased by 5% on a constant currency
basis to £46.5m driven by improved profit in Aerospace more than offsetting
the expected volume-related reduction in profit in Flexonics. Adjusted
operating margin increased by 10 basis points in 2024 to 4.8%.
The market backdrop for our Aerospace Division remains healthy with order
books for large commercial aircraft at record levels, driven by increasing air
passenger demand. There were some supply chain issues for Airbus and its
suppliers through the year, and although there are clear signs of improvement,
we expect there to be ongoing issues to be managed given the large, planned
increases in production. Boeing also had specific issues with the cap on 737
MAX production imposed following the Alaska Airlines incident in early 2024
and 3 months of lost production on 737 MAX, 767 and 777 due to the strike at
its factories in The Puget Sound. Boeing have now started to ramp up
production following the recommencement of operations in December 2024.
Senior responded to these events dynamically, supporting our customers and
controlling our costs. Nonetheless, these temporary headwinds did affect
Aerospace profitability in 2024.
Flexonics followed a more predictable path, with Senior outperforming
anticipated softer end markets in 2024.
The Group generated free cash flow of £17.3m (2023 - £15.5m) in 2024. The
improvement from 2023 was a result of lower working capital outflows more than
offsetting higher investment in capital expenditure and higher tax and
interest payments. Cash outflows from working capital were £17.0m (2023 -
£27.6m outflows), reflecting increased inventory, offset partially by inflows
from receivables and payables. Inventory was higher in Aerospace with
planned investment to enable us to meet the increase in demand from our
customers, and as a result of the impact of the Boeing strike and certain
customer schedule changes in Q4. Gross capital expenditure was £43.2m (2023
- £35.9m) which was 1.1x depreciation (excluding the impact of IFRS 16).
Further 2024 financial performance is described in the Divisional and
Financial Review sections below.
The Board has confidence in the Group's performance, financial position and
future prospects, and has approved a final dividend of 1.65 pence per share
(2023 - 1.70 pence). This will be paid on 30 May 2025 to shareholders on the
register at close of business on 2 May 2025. This brings the total
dividends, paid and proposed for 2024, to 2.40 pence per share (2023 - 2.30
pence), an increase of 4% year-on-year. We will continue to follow a
progressive dividend policy reflecting earnings per share, free cash flow
generation, market conditions and dividend cover.
Delivery of Group Strategy
We are committed to a sale of our Aerostructures business and are making good
progress. There is good buyer interest, we are now at an advanced stage of a
sale process with a small number of parties, and negotiations are progressing
positively. We are focused on completing the sale process and maximising
value for shareholders and will update the market in due course. This is in
line with our strategy to position Senior as the leading pure play fluid
conveyance and thermal management business.
Senior's Purpose is "to help engineer the transition to a sustainable world
for the benefit of all our stakeholders". We do this by:
● Technology expertise - Using our technology expertise in fluid conveyance and
thermal management to provide safe and innovative products for demanding
applications in some of the most hostile environments.
● Customer transition - Enabling our customers, who operate in some of the
hardest-to-decarbonise sectors, to transition to low-carbon and clean energy
solutions.
● Climate action - Staying at the forefront of climate disclosure and action by
ensuring our own operations achieve our Net Zero commitments.
Our extensive design expertise, intellectual property and know-how supports
our strategic focus. We offer pivotal technologies for emissions reduction
and environmental efficiency, whether that is for cleaner and more efficient
conventional technology or new low carbon product offerings.
We continue to invest in markets where we believe there is significant growth
potential and where the Group's skills and knowledge can be exploited, such as
aerospace highly engineered standard parts/components. This market has high
barriers to entry and attractive returns. We are broadening our product
portfolio for specific products such as flanges, couplings and fittings. Our
high-pressure hydraulic fittings business, Spencer Aerospace ("Spencer") has
continued to grow strongly with sales up by over 50% in 2024 compared to 2023
and has now grown over 135% since we acquired the business in late 2022.
Further information on Senior's strategy and strategic priorities can be found
on pages 34 to 35 of our Annual Report & Accounts 2024. In addition, we
will be providing further details on delivery of our strategy at our Investor
Event today at 10.00 GMT.
Market Overview
Civil Aerospace (46% of Group)
The civil aerospace sector continued its recovery with air traffic increasing
in all regions during 2024. According to the International Air Transport
Association ("IATA"), the latest data showed that total demand during the
year, measured in Revenue Passenger Kms (RPKs), increased by 10% year-on-year.
Air traffic is expected to continue to grow as incomes increase, especially
in developing markets in Asia. The long-term demand for new aircraft is
forecast to grow by 3-4% per annum driven by growth in air traffic and ongoing
fleet replacement.
Airbus delivered 766 aircraft in 2024, compared to 735 deliveries in 2023.
Airbus recently confirmed production rate targets are now: A220, 14 per
month in 2026; A320 family, 75 per month in 2027; A330 maintaining 4 per
month; and A350, 12 per month in 2028.
In 2024, Boeing delivered 348 aircraft compared to 528 deliveries in 2023.
It has been well-documented that Boeing faced challenges in 2024. The
Alaska Air 737 MAX incident in January 2024 led to the FAA imposing strict
controls over Boeing production and capped production at 38 aircraft per month
until the FAA agrees to further increases. The situation was exacerbated by
an employee strike at Boeing's Puget Sound facilities which lasted for 53 days
during which time no aircraft were produced at the affected facilities.
Production of aircraft resumed in mid-December.
Boeing reduced the production rate of its 787 model from 5 aircraft per month
to 3 for much of the year due to supply chain constraints, although production
returned to 5 per month by the year end. Boeing further announced that the
first delivery of the 777X will now be in 2026. In January 2025, the 777X
program resumed FAA certification flight testing.
Embraer is forecasting that it will deliver between 77-85 commercial aircraft
in 2025, up from 73 in 2024. It is also forecasting to deliver between
145-155 business jets in 2025, having delivered 130 in 2024. Global business
jet activity was down by 1% year-on-year in 2024 according to WingX. Global
deliveries of business jets are anticipated to increase by 11% year-on-year in
2025 and by 2% per annum over the next decade, according to Honeywell's Global
Business Aviation Outlook.
Defence (13% of Group)
Senior's sales to the Defence sector are primarily focused on US military
aircraft platforms such as the F-35 and C-130J.
Lockheed Martin has stated that they will continue to produce 156 F-35
aircraft per year, having delivered 110 in 2024. The total planned purchases
of F-35s are over 3,500, of which 31% is for the international market.
Adjacent Markets (9% of Group)
Sales from our Aerospace operating businesses into end markets outside of the
civil aerospace and defence markets are classified under "Adjacent Markets"
and include sales into the semiconductor equipment, space and medical markets.
In the semiconductor sector, global sales of wafer fabrication equipment grew
by 7% during 2024. This market is forecast to grow by a further 7% in 2025
driven by demand for AI-related chips. (Source: Semi.org)
Land Vehicle (19% of Group)
Demand in heavy-duty truck markets during 2024 weakened in both Europe and
North America, while the off-highway market remained subdued and light vehicle
markets experienced mixed conditions.
According to Americas Commercial Transportation ("ACT") research, North
American heavy-duty truck production declined by 2% in 2024 compared to 2023,
which was better than originally anticipated. This decline was due to
ongoing overcapacity in the for-hire freight-logistics sector in the USA,
which has resulted in low levels of profitability and fleet investment in the
Class 8 "tractor" sector. ACT forecast production to decline by 5% in 2025
and rebound in 2026 to 12% growth as a result of the pre-buy ahead of the
planned 2027 emission change.
Weak economic fundamentals, particularly in Germany, led to lower orders for
and production of heavy-duty trucks in Europe during 2024. S&P Global
("S&P") data shows that production was down 26% year-on-year, weaker than
originally anticipated. S&P predict production in 2025 to increase by
2%.
In the off-highway sector, demand for construction vehicles decreased in both
North America and Europe in 2024. Demand for mining equipment remained
positive in all major markets. Industry participants are forecasting that
overall demand in the off-highway sector in 2025 will decline in North America
between 0% - 10%, be flat in Europe and increase between 0% - 10% in China.
European light vehicle production declined by 7% in 2024 after two years of
post-pandemic catch-up, as supply and demand became more balanced.
Production in North America fell by 2% in 2024, as four years of inventory
restocking came to an end. In India, the other light-vehicle market to which
Senior has significant exposure, production in 2024 increased by 4%. This
relatively low rate, by Indian market standards, was due to high levels of
inventory. S&P is forecasting that production in 2025 will fall by 5% in
Europe, by 2% in North America and increase by 6% in India.
Power & Energy (13% of Group)
2024 saw growth in upstream oil & gas expenditure slowing, especially in
the Middle East, while remaining subdued in North America.
Activity in the downstream sector remains focussed in the Middle East and
Asia, where cheap feedstock and economic growth respectively is driving
demand.
Global electricity consumption grew by 4.3% in 2024 and is forecast to grow at
4% annually through 2027. Demand is being driven primarily by economic
growth, urbanisation and the adoption of EVs.
Sustainability
Senior continues to be at the forefront of sustainability reporting and
action. We believe that this is truly important and, evidently, so do many
of our customers who are including commitment and progress on sustainability
in their supplier selection decision-making process. In 2024, we made
significant strides, including meeting our Near-Term science-based target for
the reduction of greenhouse gases, a year ahead of the 2025 target date, and
progressing our Double Materiality Assessment (DMA). Looking ahead to 2025,
we will continue our focus on sustainability by supporting our customers in
their carbon reduction efforts and, having already achieved our Near Term
Scope 1 & 2 SBTi accredited targets, our full focus now turns to meeting
our 2040 Net Zero Scope 1, 2 and 3 targets.
In 2024, we achieved significant milestones in our sustainability journey:
Environmental
● Awarded 'A' leadership score by CDP for our disclosure and action on climate
change for 2024.
● We continued to reduce our Scope 1 and 2 greenhouse gas emissions, achieving a
reduction of 33% against our 2018 baseline, meeting our Near-Term
science-based target ahead of the 2025 target date.
● Electricity sourced from renewable energy increased to 52%, from 48% in 2023.
● We extended our support to suppliers yet to set carbon reduction targets and
updated our Sustainable Sourcing Policy.
Social
● We undertook our annual Global Employee Engagement Survey in May 2024 and were
pleased to see improvements in the participation rate, engagement, and health
& wellbeing scores.
● Our Lost Time Injury Illness & Illness Rate in 2024 reduced by over 40% to
0.19, down from 0.32 in 2023.
● Currently, 56% of the Board Directors are female, including the Chair of the
Audit Committee, the Senior Independent Director, who is also Chair of the
Remuneration Committee, and the Group Finance Director. The Chair of the
Audit Committee is also the non-executive Director with Board responsibility
for employee engagement. Two of the Directors (22%) are from ethnic minority
backgrounds.
Governance
● We deployed an enhanced Group Anti-Fraud Policy.
● We carried out a Group-level double materiality assessment. The results of
the assessment will inform Senior's approach to enhancing and evolving its
sustainability strategy.
Further information on Senior's sustainability activities can be found on
pages 12 to 31 of our Annual Report & Accounts 2024.
Outlook
We are committed to a sale of our Aerostructures business and are making good
progress. There is good buyer interest, we are now at an advanced stage of a
sale process with a small number of parties, and negotiations are progressing
positively. We are focused on completing the sale process and maximising
value for shareholders and will update the market in due course. This is in
line with our strategy to position Senior as the leading pure play fluid
conveyance and thermal management business.
For the year ahead, the Board anticipates good growth for the Group, in line
with its expectations. We are closely monitoring the impact on global trade
from potential tariff changes.
Increasing aircraft build rates, operational efficiency benefits and improved
contract pricing are expected to drive good growth in Aerospace in 2025, with
H2 expected to be higher than H1.
For the full year, Aerostructures is expected to improve from a loss making
position in 2024 to an operating profit range of £9m to £11m in 2025, with
the large majority of that being earned in H2.
We expect Flexonics performance in 2025 to be broadly similar to 2024.
In land vehicles, the ramp up of programmes recently won means we expect our
2025 performance to be broadly similar to 2024, despite some softness in North
America and Germany. In power and energy, activity levels are expected to be
similar to 2024.
Our strategy of positioning Senior as a pure play fluid conveyance and thermal
management business in attractive and structurally resilient core markets;
with active portfolio management; combined with our highly relevant technical
capabilities; and sector-leading sustainability credentials, provides
confidence of continuing performance improvements for the Group. Reflecting
the Board's confidence, we have today announced new and improved medium term
financial targets which will be discussed in detail at the Investor Event
today at 10.00 GMT.
DAVID SQUIRES
Group Chief Executive Officer
DIVISIONAL REVIEW
Aerospace Division
In 2024, the Aerospace Division represented 68% (2023 - 64%) of Group revenue,
consisting of 14 operations. These are located in North America (six), the
United Kingdom (four), France (two), Thailand and Malaysia. This Divisional
review is on a constant currency basis, whereby 2023 results have been
translated using 2024 average exchange rates and on an adjusted basis to
exclude amortisation of intangible assets from acquisitions, site relocation
costs, US class action lawsuit and net restructuring costs. The Division's
operating results on a constant currency basis are summarised below:
2024 2023 ((1)) Change
Revenue £660.8m £601.4m +9.9%
Adjusted operating profit £30.4m £26.6m +14.3%
Adjusted operating margin 4.6% 4.4% +20bps
((1)) 2023 results translated using 2024 average exchange rates - constant currency.
Divisional revenue increased by £59.4m (9.9%) to £660.8m (2023 - £601.4m)
whilst adjusted operating profit increased by £3.8m (14.3%) to £30.4m (2023
- £26.6m).
Revenue Reconciliation £m
2023 revenue 601.4
Civil aerospace 46.6
Defence 1.8
Other adjacent markets 11.0
2024 revenue 660.8
Contract Wins
The Aerospace Division has been awarded several new or extended contracts in
2024 from the following customers:
● Deutsche Aircraft. A new life of programme contract for the design,
development and manufacture of high-pressure ducting for the sustainable
D328eco aircraft from our SSP business in California and our Bird Bellows
business in the UK.
● Safran Aircraft Engines. Awarded a multi-year contract for the supply of
Maintenance, Repair and Overhaul (MRO) services for the CFM56 engine to be
undertaken at Senior Aerospace's Ermeto facility in Blois, France.
● Airbus SA. A multi-year contract extension for the manufacture and supply of
various aerostructures parts from our businesses in Thailand and Malaysia.
● Airbus Atlantic. A new contract for the supply of business class seat
structures from our business in Thailand.
● Spirit AeroSystems. A 5-year contract extension for the supply of large
diameter precision formed and machined structural components for various
Boeing commercial programmes from our Jet Products business in California.
● Collins Aerospace (RTX). New multi-year production contracts for the supply
of precision formed and machined thrust reverser structural components for
commercial aerospace platforms at Airbus and Boeing from our Jet Products
business in California.
● Rolls-Royce. A new 5-year contract for the supply of aerofoils for the Pearl
engine family and manufacturing will be undertaken at our business in
Thailand.
Performance
Aerospace Division revenue in 2024 increased by 9.9% year-on-year on a
constant currency basis, benefiting from increase in demand across all market
sectors. The increase year-on-year reflected the ongoing ramp up in civil
aircraft production rates, notwithstanding 737 MAX volumes being subdued
following the Alaska Airlines incident in January 2024 and the Boeing employee
strike from September to November 2024. Other adjacent markets (mainly the
semiconductor equipment market) and defence also contributed to growth in the
division.
The civil aerospace sector had good growth during the period with Senior's
sales increasing by 11.6% compared to prior year. This was as a result of
increased deliveries to Airbus programmes, higher prices, activity levels
increasing in our Thailand business as a key supplier recovers from a fire
last year as well as, continued strong growth in revenue from Spencer
Aerospace (more than 50%). 22% of civil aerospace sales were from widebody
aircraft in 2024, with the other 78% sales being from single aisle, regional
and business jets.
Total revenue from the defence sector increased by £1.8m (1.4%) primarily due
to higher sales on the F35 programme.
Revenue derived from other adjacent markets such as space, power & energy,
medical and semiconductor equipment, where the Group manufactures products
using very similar technology to that used for certain aerospace products,
increased by £11.0m (15.4%) due to price increases and semiconductor
equipment market starting to recover.
The market backdrop for our Aerospace Division remains healthy with order
books for large commercial aircraft at record levels, driven by increasing air
passenger demand. There were some supply chain issues for Airbus and its
suppliers through the year, and although there are clear signs of improvement,
we expect there to be ongoing issues to be managed given the large, planned
increases in production. Boeing also had specific issues with the cap on 737
MAX production imposed following the Alaska Airlines incident in early 2024
and 3 months of lost production on 737 MAX, 767 and 777 due to the strike at
its factories in The Puget Sound. Boeing have now started to ramp up
production following the recommencement of operations in December 2024.
Senior responded to these events dynamically, supporting our customers and
controlling our costs. Nonetheless, these temporary headwinds did affect
Aerospace profitability in 2024 compared to original expectations. During the
period, adjusted operating profit increased by 14.3% to £30.4m (2023 -
£26.6m) and the adjusted operating margin increased by 20 basis points to
4.6% (2023 - 4.4%). This increased profitability reflected the benefits of
price increases and higher volumes.
Outlook
Increasing aircraft build rates, operational efficiency benefits and improved
contract pricing are expected to drive good growth in Aerospace in 2025, with
H2 performance expected to be higher than H1.
For the full year, Aerostructures is expected to improve from a loss making
position in 2024 to an operating profit range of £9m to £11m in 2025, with
the large majority of that being earned in H2.
Supplementary information - Aerospace division sales and operating profit
Revenue Adjusted trading and operating profit
Year Year ((1)) Year ((1)) Year Year ((1)(2)) Year ((1))
ended
ended
ended
ended
ended
ended
2024
2023
2022
2024
2023
2022
£m £m £m £m £m £m
Aerostructures 272.4 246.7 235.4 (6.5) (11.1) (3.7)
Aerospace excluding Aerostructures 391.1 357.7 306.5 36.9 37.7 23.4
Eliminations (2.7) (3.0) (2.7) - - -
Total Aerospace 660.8 601.4 539.2 30.4 26.6 19.7
((1)) 2023 and 2022 results translated using 2024 average exchange rates - constant
currency.
((2)) 2023 results included benefit from retrospective inflationary cost recoveries.
Flexonics Division
The Flexonics Division represents 32% (2023 - 36%) of Group revenue and
consists of 12 operations which are located in North America (four),
continental Europe (two), the United Kingdom (two), South Africa, India, and
China (two including the Group's 49% equity stake in a land vehicle product
joint venture). This Divisional review, presented before the share of the
joint venture results, is on a constant currency basis, whereby 2023 results
have been translated using 2024 average exchange rates and on an adjusted
basis to exclude site relocation costs and net restructuring costs. The
Division's operating results on a constant currency basis are summarised
below:
2024 2023 ((1)) Change
Revenue £317.7m £337.5m -5.9%
Adjusted operating profit £35.1m £36.2m -3.0%
Adjusted operating margin 11.0% 10.7% +30bps
((1)) 2023 results translated using 2024 average exchange rates - constant currency.
Divisional revenue decreased by £19.8m (-5.9%) to £317.7m (2023 - £337.5m)
and adjusted operating profit decreased by £1.1m (-3.0%) to £35.1m (2023 -
£36.2m).
Revenue Reconciliation £m
2023 revenue 337.5
Land vehicle (7.2)
Power & energy (12.6)
2024 revenue 317.7
Contract Wins
The Flexonics Division won a number of important contracts in 2024 which
include:
● Contract with Gail India Limited to manufacture and deliver over 100 expansion
joints for a new Catofin project, supplied by our Pathway business in the USA.
● New contract signed with European truck OEM to supply tubes and pipes for a
new engine to be used in multiple platforms with manufacturing being
undertaken in Flexonics Olomouc, Cape Town and Saltillo facilities.
● Several new or extended contracts with North American heavy-duty truck OEMs
with supply from our Bartlett business, with facilities in the USA and Mexico.
● New contracts with passenger vehicle OEMs in Europe supplying metal pipes and
tubing for various engines from our Olomouc business in the Czech Republic.
Performance
Flexonics Division revenue in 2024 decreased by 5.9% year-on-year on a
constant currency basis. Strong revenue growth from downstream oil and gas
and nuclear, was offset by lower upstream oil and gas business and the
anticipated softness in land vehicle markets.
Global land vehicle markets softened as expected in 2024, nevertheless, our
sales outperformed key end markets. Group land vehicle sales decreased by
3.7% driven by softer market conditions which were partially mitigated by the
benefit from the launch and ramp up of new programmes in North America and
Europe. Senior's sales to the North American truck market decreased by
£1.2m (-2.0%) with market production decreasing by 2.3%. Our North American
off-highway sales decreased £5.2m (-13.5%). Sales to other truck and
off-highway regions, including Europe and India, were flat as growth from
India offset reduced customer demand in Europe. The European truck and
off-highway market decreased by 26% in 2024 primarily due to the weakness of
the German economy. Senior's sales, however, only decreased by 1.6% in the
period as we benefited from the launch and ramp of new programme wins. For
example, Senior Flexonics Olomouc benefited from higher sales from a new
project launched last year. There was also a one-off benefit from a large
order placed by a Swedish OEM to our Senior Flexonics Kassel business. Group
sales to passenger vehicle markets decreased by £0.8m (-1.7%) in the year.
In the Group's power & energy markets sales decreased by £12.6m (-9.5%)
in the year. Sales to other power & energy markets increased by £4.8m
(5.4%) reflecting growth in sales to power generation, nuclear and renewables
industry customers. Sales to oil and gas customers decreased by £17.4m
(‑32.8%). The Group saw robust demand in our downstream oil and gas
business, partially offsetting a reduction in sales from one of our operating
businesses to our upstream oil and gas customers due to a lower share of this
very competitive business.
Adjusted operating profit decreased by £1.1m compared to prior period as a
result of lower sales. Nevertheless, operational efficiencies, lower costs
and favourable product mix helped increase margins by 30 basis points to 11.0%
(2023 -10.7%).
Outlook
We expect Flexonics performance in 2025 to be broadly similar to 2024.
In land vehicles, the ramp up of programmes recently won means we expect our
2025 performance to be broadly similar to 2024, despite some softness in North
America and Germany. In power and energy, activity levels are expected to be
similar to 2024.
FINANCIAL REVIEW
Group revenue
Group revenue was £977.1m (2023 - £963.5m). Excluding the adverse exchange
rate impact of £25.5m, Group revenue increased by £39.1m (4.2%) with growth
in the Aerospace Division and an anticipated reduction in the Flexonics
Division.
Operating profit
Adjusted operating profit increased by £0.7m (1.5%) to £46.5m (2023 -
£45.8m). Excluding the adverse exchange rate impact of £1.6m, adjusted
operating profit increased by £2.3m (5.2%) on a constant currency basis.
After accounting for £1.6m amortisation of intangible assets from
acquisitions (2023 - £2.2m), £3.5m site relocation costs (2023 - £0.1m),
£1.1m US class action lawsuit (2023 - £nil) and £nil net restructuring
costs (2023 - £5.6m), reported operating profit was £40.3m (2023 - £37.9m).
The Group's adjusted operating margin of 4.8% increased by 10 basis points on
a constant currency basis, with increases in both Aerospace and Flexonics
divisions. Adjusted operating margin in Aerospace benefited from price
increases and higher volumes. Operational efficiencies, lower costs and
favourable product mix helped Flexonics more than offset the impact of lower
volumes.
Finance costs and income
Finance costs, net of finance income and before fair value changes in
acquisition consideration increased to £13.5m (2023 - £7.5m) and comprise
IFRS 16 interest charge on lease liabilities of £3.4m (2023 - £2.9m), net
finance income on retirement benefits of £2.0m (2023 - £2.1m) and net
interest charge of £12.1m (2023 - £10.2m). Also in 2023, interest unwind
on uncertain tax positions of £3.5m was included, as described further below
in the tax section. The £1.9m increase in net interest charge was driven by
higher underlying interest rates on variable rate debt and higher levels of
indebtedness in 2024 versus the prior year.
Before fair value changes in acquisition consideration, gross finance costs
were £21.9m (2023 - £17.6m) and gross finance income was £8.4m (2023 -
£10.1m including £3.5m benefit of interest unwind on uncertain tax
positions). The change in fair value on acquisition consideration was net
income of £2.2m (2023 - £2.9m interest unwind), comprising £3.6m income,
relating to the 2025 earnout target no longer expected to be payable, as a
result of the impact of the well publicised 737 MAX subdued volumes, partly
offset by £1.4m interest unwind.
Profit before tax
Adjusted profit before tax decreased by 14% to £33.0m (2023 - £38.3m)
reflecting higher net interest costs including the non-repeat of £3.5m prior
year benefit of interest unwind on uncertain tax positions. Reported profit
before tax increased by 22% to £27.8m (2023 - £22.8m) mainly due to
operating profit and corporate undertakings favourable movements partly offset
by non-repeat prior year interest unwind benefit. The reconciling items
between adjusted profit and reported profit before tax are shown in Note 4.
Tax charge/credit
The adjusted tax rate for the year was 10.0% charge (2023 - 11.0% credit),
being a tax charge of £3.3m (2023 - £4.2m credit) on adjusted profit before
tax of £33.0m (2023 - £38.3m). The adjusted tax rate benefitted from the
recognition of a £2.2m deferred tax asset in respect of historical tax
losses, enhanced R&D deductions in the US and the geographical mix of
taxable profits. In 2023, the adjusted tax rate also benefitted from a
release of £7.0m of provision for uncertain tax positions. This release and
associated interest release of £3.5m followed a series of steps to simplify
the legal ownership of the Group's Americas legal entity holding structure.
The reported tax rate was 6.8% charge, being a tax charge of £1.9m on
reported profit before tax of £27.8m. This included £1.4m net tax credit
against items excluded from adjusted profit before tax, of which £0.4m credit
related to amortisation of intangible assets from acquisitions, £1.0m credit
related to site relocation costs, £0.3m credit related to US class action
lawsuit and £0.3m charge related to corporate undertakings in the year.
The 2023 reported tax rate was 36.4% credit, being a tax credit of £8.3m on
reported profit before tax of £22.8m. This included £7.0m credit related
to the release of provision for uncertain tax positions as described above and
£4.1m net tax credit against items excluded from adjusted profit before tax,
of which £0.6m credit related to amortisation of intangible assets from
acquisitions, £1.5m credit related to net restructuring costs, £0.1m credit
related to site relocation costs and £1.9m credit related to corporate
undertakings in the year.
Cash tax paid was £7.4m (2023 - £5.6m) and is stated net of refunds received
of £1.2m (2023 - £2.8m) in respect of UK R&D expenditure credit payments
and tax paid in prior periods.
Earnings per share
The weighted average number of shares, for the purposes of calculating
undiluted earnings per share, increased to 414.3 million (2023 - 413.3
million). The increase arose principally due to shares released from the
employee benefit trust to satisfy the vesting of certain share-based payments
during 2024, partly offset by the purchase of shares held by the trust. The
adjusted earnings per share was 7.17 pence (2023 - 10.28 pence, which included
a benefit of 2.54 pence from the release of the provision for uncertain tax
positions as described above).
Basic earnings per share was 6.25 pence (2023 - 7.52 pence). See Note 7 for
details of the basis of these calculations.
Return on capital employed ("ROCE")
ROCE, a key performance indicator for the Group as defined in the Notes to the
Financial Headlines, decreased by 30 basis points to 6.8% (2023 - 7.1%). The
decrease in ROCE was mainly a result of higher inventory and investment in
growth not yet fully offset by the growth in profit, which was impacted by
near-term temporary customer led headwinds.
Cash flow
The Group generated operating cash flow of £39.3m (2023 - £34.0m), a cash
conversion of 85% of adjusted operating profit. Free cash flow was £17.3m
in 2024 (2023 - £15.5m) as set out in the following table:
2024 2023
£m
£m
Operating profit 40.3 37.9
Amortisation of intangible assets from acquisitions 1.6 2.2
Site relocation costs 3.5 0.1
US class action lawsuit 1.1 -
Net restructuring costs - 5.6
Adjusted operating profit 46.5 45.8
Depreciation (including amortisation of software) 49.0 49.5
Working capital and provisions movement, net of restructuring items (17.0) (27.6)
Pension contributions (0.8) (1.4)
Pension service and running costs 1.9 1.3
Other items(1) 2.8 1.6
Capital expenditure (43.2) (35.9)
Sale of property, plant and equipment 0.1 0.7
Operating cash flow 39.3 34.0
Interest paid, net (14.6) (12.9)
Income tax paid, net (7.4) (5.6)
Free cash flow 17.3 15.5
Site relocation costs paid (1.6) -
Net restructuring costs paid (0.5) (2.1)
US pension settlement - (0.9)
Corporate undertakings (13.0) (25.8)
Dividends paid (10.1) (6.6)
Dividends from Joint Venture 3.0 -
Purchase of shares held by employee benefit trust net of repayments (4.9) (5.6)
Net cash flow (9.8) (25.5)
Effect of foreign exchange rate changes (3.1) 8.5
IFRS 16 non-cash additions and modifications including acquisition (12.9) (7.9)
Change in net debt (25.8) (24.9)
Opening net debt (203.8) (178.9)
Closing net debt (229.6) (203.8)
((1)) Other items comprises £4.5m share-based payment charges (2023 - £4.1m),
£(1.3m) profit on share of joint venture (2023 - £(1.0m)), £(0.4m) working
capital and provision currency movements (2023 - £(1.3m)) and £nil profit on
sale of fixed assets (2023 - £(0.2m)).
Capital expenditure
Gross capital expenditure of £43.2m (2023 - £35.9m) was 1.1 times
depreciation excluding the impact of IFRS 16 (2023 - 0.9 times). The
disposal of property, plant and equipment raised £0.1m (2023 - £0.7m).
2025 capital investment is expected to be above depreciation (excluding the
impact of IFRS 16), the majority of which is investment on growth projects
where contracts have been secured, with the rest on important replacement
equipment for current production and sustainability related items.
Working capital
Working capital increased by £18.1m in 2024 to £179.0m as at 31 December
2024 (31 December 2023 - £160.9m), of which £1.9m increase related to
foreign currency movements. Inventory was higher particularly in Aerospace
with planned investment to enable us to meet the strong increase in demand
from our customers and was also as a result of 737 MAX production being lower
than initially resourced for, exacerbated by the Boeing employee strike in the
Puget sound area, coupled with schedule changes in Q4 from a customer who is
an Airbus tier one supplier. Receivables were higher as a result of revenue
growth. In 2024, working capital increased as a percentage of sales by 160
basis points to 18.3% (2023 - 16.7%). We are likely to see an increase in
working capital over the coming year to support the growth anticipated in
Aerospace, however working capital as a percentage of sales is expected to
reduce towards the 17% level.
Retirement benefit schemes
The retirement benefit surplus in respect of the Group's UK defined benefit
pension plan ("the UK Plan") decreased by £5.0m to £43.5m (31 December 2023
- £48.5m) due to £6.0m net actuarial losses and £1.2m running costs partly
offset by £2.2m net interest income. Retirement benefit deficits in respect
of the US and other territories decreased by £1.2m to £6.8m (31 December
2023 - £8.0m).
The latest triennial actuarial valuation of the UK Plan as at 5 April 2022
showed a surplus of £24.5m (5 April 2019 - deficit of £10.2m). The Group's
deficit reduction cash contributions, including administration costs, to the
UK Plan ceased on 30 June 2022.
The estimated cash contributions expected to be paid during 2025 in the US
funded plans is £0.4m (£0.4m was paid in 2024).
Net debt
Net debt which includes IFRS 16 lease liabilities increased by £25.8m to
£229.6m at 31 December 2024 (31 December 2023 - £203.8m). As noted in the
cash flow above, the Group generated net cash outflow of £9.8m (as defined in
Note 12), before £3.1m adverse foreign currency movements and £12.9m
non-cash changes in lease liabilities due to additions and modifications.
Net debt excluding IFRS 16 lease liabilities of £76.2m (31 December 2023 -
£71.8m) increased by £21.4m to £153.4m at 31 December 2024 (31 December
2023 - £132.0m), due to free cash inflow of £17.3m and £3.0m dividend
received from the Joint Venture being more than offset by £15.0m outflow for
dividends and net purchase of shares, £13.0m cash outflow in respect of
corporate undertakings, £10.0m capital repayment of leases, £2.1m net cash
outflows for site relocation and restructuring and £1.6m adverse foreign
currency movements.
Funding and Liquidity
As at 31 December 2024, the Group's gross borrowings excluding leases and
transaction costs directly attributable to borrowings were £200.0m (31
December 2023 - £181.0m), with 64% of the Group's gross borrowings
denominated in US Dollars (31 December 2021 - 61%). Cash and bank balances
were £45.5m (31 December 2023 - £47.6m).
The maturity of these borrowings, together with the maturity of the Group's
committed facilities, can be analysed as follows:
Gross (2) Committed
borrowings
facilities
£m
£m
Within one year 75.0 75.0
In the second year 9.5 34.8
In years three to five 75.5 162.1
After five years 40.0 40.0
200.0 311.9
((2)) Gross borrowings include other loans and committed facilities, but exclude
leases of £76.2m and transaction costs directly attributable to borrowings of
£(1.1)m.
At the year-end, the Group had committed facilities of £311.9m comprising
private placement debt of £162.1m and revolving credit facilities of
£149.8m. The Group is in a strong funding position, with headroom at 31
December 2024 of £158.5m in cash and undrawn facilities.
In the first half, the US RCF of $50m was extended by a year and will now
mature in June 2026. New private placement loan notes of $40m (£32m) were
issued and drawn down in February 2025, carrying an interest rate of 5.46% and
are due for repayment in February 2029. These new loan notes have refinanced
the maturing £27m private placement loan notes that were repaid in January
2025.The weighted average maturity of the Group's committed facilities at 31
December 2024 was 2.5 years.
The Group has £nil (2023 - £1.8m) of uncommitted borrowings which are
repayable on demand.
The Group has two covenants for committed borrowing facilities, which are
tested at June and December: the Group's net debt to EBITDA (defined in the
Notes to the Financial Headlines) must not exceed 3.0x and interest cover, the
ratio of EBITDA to interest must be higher than 3.5x. At 31 December 2024,
the Group's net debt to EBITDA was 1.8x and interest cover was 7.0x, both
comfortably within covenant limits.
Going concern and viability
In accordance with provisions 30 and 31 of the 2018 UK Corporate Governance
Code, the Directors have concluded that there is a reasonable expectation as
to the Group's longer-term viability and have continued to adopt the going
concern basis in preparing the Financial Statements. The full viability
statement can be found on page 68 of the Annual Report & Accounts 2024.
In assessing going concern, taking into account the level of cash and
available committed facilities the Directors concluded that the Group has
sufficient funds, and is forecast to be in compliance with debt covenants at
all measurement dates, to allow it to operate for the foreseeable future (a
period of at least 12 months from the date of approval of the Financial
Statements), even in a severe but plausible downside scenario.
In forming their conclusion, the Board has undertaken a rigorous assessment of
the financial forecasts, key uncertainties, sensitivities, and has reviewed a
severe but plausible downside scenario, which reflects the probability
weighted and cumulative estimated effects of the Group's principal risks and
uncertainties as disclosed on pages 54 to 59 of the Annual Report &
Accounts 2024.
Risks and uncertainties
The principal risks and uncertainties faced by the Group are set out in detail
on pages 54 to 59 of the Annual Report & Accounts 2024.
Responsibility statement of the Directors in respect of the Annual Report
& Accounts 2024
We confirm that to the best of our knowledge:
1. the Financial Statements, as included in the Annual Report &
Accounts 2024, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the company and the undertakings included in
the consolidation taken as a whole; and
2. the Strategic Report, set out in the Annual Report & Accounts 2024,
includes a fair review of the development and performance of the business and
the position of the issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and
uncertainties that they face.
By Order of the Board
David Squires Bindi Foyle
Group Chief Executive Officer
Group Finance Director
28 February 2025 28 February 2025
Consolidated Income Statement
For the year ended 31 December 2024
Notes Year ended Year ended
2024
2023
£m £m
Revenue 3 977.1 963.5
Trading profit 39.0 36.9
Share of joint venture profit 9 1.3 1.0
Operating profit ((1)) 3 40.3 37.9
Finance income 10.6 10.1
Finance costs (21.9) (20.5)
Corporate undertakings 4 (1.2) (4.7)
Profit before tax ((2)) 27.8 22.8
Tax (charge)/credit 5 (1.9) 8.3
Profit for the period 25.9 31.1
Attributable to:
Equity holders of the parent 25.9 31.1
Earnings per share
Basic ((3)) 7 6.25p 7.52p
Diluted ((4)) 7 6.12p 7.32p
((1)) Adjusted operating profit 4 46.5 45.8
((2)) Adjusted profit before tax 4 33.0 38.3
((3)) Adjusted earnings per share 7 7.17p 10.28p
((4)) Adjusted and diluted earnings per share 7 7.01p 10.00p
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
Year ended Year ended
2024
2023
£m £m
Profit for the period 25.9 31.1
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
(Losses)/gains on foreign exchange contracts - cash flow hedges during the (2.8) 2.7
period
Reclassification adjustments for losses included in profit (0.1) 0.9
(Losses)/gains on foreign exchange contracts - cash flow hedges (2.9) 3.6
Exchange differences on translation of overseas operations 4.0 (16.9)
Tax relating to items that may be reclassified 0.8 (0.9)
1.9 (14.2)
Items that will not be reclassified subsequently to profit or loss:
Actuarial losses on defined benefit pension schemes (4.8) (2.6)
Tax relating to items that will not be reclassified 1.1 0.6
(3.7) (2.0)
Other comprehensive income for the period, net of tax (1.8) (16.2)
Total comprehensive income for the period 24.1 14.9
Attributable to:
Equity holders of the parent 24.1 14.9
Consolidated Balance Sheet
As at 31 December 2024
Notes Year ended Year ended
2024
2023
£m £m
Non-current assets
Goodwill 8 195.4 193.3
Other intangible assets 32.1 33.1
Investment in joint venture 9 3.3 5.1
Property, plant and equipment 10 292.1 284.7
Deferred tax assets 27.5 20.7
Retirement benefits 13 43.5 48.5
Trade and other receivables 0.4 0.8
Total non-current assets 594.3 586.2
Current assets
Inventories 236.0 207.5
Current tax receivables 2.8 2.3
Trade and other receivables 137.2 141.7
Cash and bank balances 12c) 45.5 47.6
Total current assets 421.5 399.1
Total assets 1,015.8 985.3
Current liabilities
Trade and other payables 196.9 188.4
Current tax liabilities 8.0 10.0
Lease liabilities 13.6 12.4
Bank overdrafts and loans 12c) 75.0 1.8
Provisions 11.3 10.5
Contingent consideration 13.0 10.5
Total current liabilities 317.8 233.6
Non-current liabilities
Bank and other loans 12c) 123.9 177.8
Retirement benefits 13 6.8 8.0
Deferred tax liabilities 8.2 7.0
Lease liabilities 62.6 59.4
Provisions 14.6 15.0
Contingent consideration 3.5 18.5
Others 8.5 8.9
Total non-current liabilities 228.1 294.6
Total liabilities 545.9 528.2
Net assets 469.9 457.1
Equity
Issued share capital 11 41.9 41.9
Share premium account 14.8 14.8
Equity reserve 7.8 7.9
Hedging and translation reserve 39.2 37.3
Retained earnings 376.7 368.0
Own shares (10.5) (12.8)
Equity attributable to equity holders of the parent 469.9 457.1
Total equity 469.9 457.1
Condensed Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
All equity is attributable to equity holders of the parent
Issued Share Equity Hedging Trans Retained Own Total
share
premium
reserve
reserve
-lation
earnings
shares
equity
capital
account
reserve
£m £m £m £m £m £m £m £m
Balance at 1 January 2023 41.9 14.8 6.4 (38.8) 90.3 346.5 (11.7) 449.4
Profit for the period - - - - - 31.1 - 31.1
Gains on foreign exchange contracts- cash flow hedges - - - 3.6 - - - 3.6
Exchange differences on translation of overseas operations - - - - (16.9) - - (16.9)
Actuarial losses on defined benefit pension schemes - - - - - (2.6) - (2.6)
Tax relating to components of other comprehensive income - - - (0.9) - 0.6 - (0.3)
Total comprehensive income/(expense) for the period - - - 2.7 (16.9) 29.1 - 14.9
Share-based payment charge - - 4.1 - - - - 4.1
Tax relating to share-based payments - - - - - 0.9 - 0.9
Purchase of shares held by employee benefit trust - - - - - - (5.6) (5.6)
Use of shares held by employee benefit trust - - - - - (4.5) 4.5 -
Transfer to retained earnings - - (2.6) - - 2.6 - -
Dividends paid - - - - - (6.6) - (6.6)
Balance at 31 December 2023 41.9 14.8 7.9 (36.1) 73.4 368.0 (12.8) 457.1
Profit for the period - - - - - 25.9 - 25.9
Gain on foreign exchange contracts- cash flow hedges - - - (2.9) - - - (2.9)
Exchange differences on translation of overseas operations - - - - 4.0 - - 4.0
Actuarial losses on defined benefit pension schemes - - - - - (4.8) - (4.8)
Tax relating to components of other comprehensive income - - - 0.8 - 1.1 - 1.9
Total comprehensive (expense)/income for the period - - - (2.1) 4.0 22.2 - 24.1
Share-based payment charge - - 4.5 - - - - 4.5
Tax relating to share-based payments - - - - - (0.8) - (0.8)
Purchase of shares held by employee benefit trust net of repayments - - - - - 2.1 (7.0) (4.9)
Use of shares held by employee benefit trust - - - - - (9.3) 9.3 -
Transfer to retained earnings - - (4.6) - - 4.6 - -
Dividends paid - - - - - (10.1) - (10.1)
Balance at 31 December 2024 41.9 14.8 7.8 (38.2) 77.4 376.7 (10.5) 469.9
Consolidated Cash Flow Statement
For the year ended 31 December 2024
Notes Year ended Year ended
2024
2023
£m
£m
Net cash from operating activities 12a) 49.4 41.4
Investing activities
Interest received 6.6 4.3
Proceeds on disposal of property, plant and equipment 0.1 0.7
Purchases of property, plant and equipment (41.5) (33.7)
Purchases of intangible assets (1.7) (2.2)
Dividend from joint venture 3.0 -
Acquisition of Spencer 14 (10.7) (23.9)
Net cash used in investing activities (44.2) (54.8)
Financing activities
Dividends paid (10.1) (6.6)
New loans 152.2 136.2
Repayment of borrowings (132.0) (96.2)
Purchase of shares held by employee benefit trust (6.3) (5.6)
Repayments from employee benefit trust 1.4 -
Repayment of lease liabilities (10.0) (10.2)
Net cash (used)/generated in financing activities (4.8) 17.6
Net increase in cash and cash equivalents 0.4 4.2
Cash and cash equivalents at beginning of period 45.8 42.7
Effect of foreign exchange rate changes (0.7) (1.1)
Cash and cash equivalents at end of period 12c) 45.5 45.8
Notes to the above Financial Statements
For the year ended 31 December 2024
1. General information
These results for the year ended 31 December 2024 are an excerpt from the
Annual Report & Accounts 2024 and do not constitute the Group's statutory
accounts for 2024 or 2023. Statutory accounts for 2023 have been delivered
to the Registrar of Companies, and those for 2024 will be delivered following
the Company's Annual General Meeting. The Auditor has reported on both those
accounts; their reports were unqualified, did not draw attention to any
matters by way of emphasis and did not contain statements under Sections
498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.
2. Significant accounting policies
Whilst the financial information included in this Annual Results Release has
been prepared in accordance with UK-adopted international accounting
standards, this announcement does not itself contain sufficient information to
comply with UK-adopted international accounting standards. Full Financial
Statements that comply with UK-adopted international accounting standards are
included in the Annual Report & Accounts 2024 which is available online at
www.seniorplc.com. Printed copies will be distributed on or soon after 14
March 2025.
At the date of authorisation of the Group's Financial Statements, there are no
relevant and material new standards, amendments to standards or
interpretations which are effective for the year ended 31 December 2024.
3. Segmental information
The Group reports its segment information as two operating divisions according
to the market segments they serve, Aerospace and Flexonics, which is
consistent with the oversight employed by the Executive Committee. The chief
operating decision maker, as defined by IFRS 8, is the Executive Committee.
The Group is managed on the same basis, as two operating divisions.
Business Segments
Segment information for revenue and operating profit and a reconciliation to
the Group profit after tax is presented below:
Aerospace Flexonics Eliminations Total Aerospace Flexonics Eliminations Total
/ central
/ central
costs
costs
Year Year Year Year Year Year Year Year
ended
ended
ended
ended
ended
ended
ended
ended
2024
2024
2024
2024
2023
2023
2023
2023
£m £m £m £m £m £m £m £m
External revenue 659.7 317.4 - 977.1 615.7 347.8 - 963.5
Inter-segment revenue 1.1 0.3 (1.4) - 0.8 0.2 (1.0) -
Total revenue 660.8 317.7 (1.4) 977.1 616.5 348.0 (1.0) 963.5
Adjusted trading profit 30.4 35.1 (20.3) 45.2 27.0 37.5 (19.7) 44.8
Share of joint venture profit - 1.3 - 1.3 - 1.0 - 1.0
Adjusted operating profit (note 4) 30.4 36.4 (20.3) 46.5 27.0 38.5 (19.7) 45.8
Amortisation of intangible assets from acquisitions (1.6) - - (1.6) (2.2) - - (2.2)
Site relocation costs (3.0) (0.5) - (3.5) - (0.1) - (0.1)
US class action lawsuit (1.1) - - (1.1) - - - -
Net restructuring costs (note 4) - - - - (3.6) (2.0) - (5.6)
Operating profit 24.7 35.9 (20.3) 40.3 21.2 36.4 (19.7) 37.9
Finance income 10.6 10.1
Finance costs (21.9) (20.5)
Corporate undertakings (1.2) (4.7)
Profit before tax 27.8 22.8
Tax (Note 5) (1.9) 8.3
Profit after tax 25.9 31.1
Trading profit and adjusted trading profit is operating profit and adjusted
operating profit respectively before share of joint venture profit. See Note
4 for the derivation of adjusted operating profit.
Segment information for assets and liabilities is presented below.
Assets Year ended Year ended
2024
2023
£m
£m
Aerospace 679.6 646.5
Flexonics 213.0 215.4
Segment assets for reportable segments 892.6 861.9
Unallocated
Central 3.7 4.0
Cash 45.5 47.6
Deferred and current tax 30.3 23.0
Retirement benefits 43.5 48.5
Others 0.2 0.3
Total assets per Consolidated Balance Sheet 1,015.8 985.3
Liabilities Year ended Year ended
2024
2023
£m
£m
Aerospace 202.8 183.1
Flexonics 77.7 79.9
Segment liabilities for reportable segments 280.5 263.0
Unallocated
Central 17.3 22.2
Loans and Overdrafts 198.9 179.6
Deferred and current tax 16.2 17.0
Retirement benefits 6.8 8.0
Contingent consideration 16.5 29.0
Others 9.7 9.4
Total liabilities per Consolidated Balance Sheet 545.9 528.2
Total revenue is disaggregated by market sectors as follows:
Year Year
ended
ended
2024
2023
£m £m
Civil Aerospace 447.7 410.5
Defence 130.6 132.6
Other 82.5 73.4
Aerospace 660.8 616.5
Land Vehicles 187.6 201.7
Power & Energy 130.1 146.3
Flexonics 317.7 348.0
Eliminations (1.4) (1.0)
Total revenue 977.1 963.5
Other Aerospace comprises space and non-military helicopters and other
markets, principally including semiconductor, medical, and industrial
applications.
4. Adjusted operating profit and adjusted profit before tax
The presentation of adjusted operating profit and adjusted profit before tax
measures, derived in accordance with the table below, has been included to
identify the performance of the Group prior to the impact of amortisation of
intangible assets from acquisitions, net restructuring costs, site relocation
costs, US class action lawsuit and costs associated with corporate
undertakings. The Board has a policy, which was clarified in 2023, to
separately disclose items it considers are outside the normal course of
management oversight and control on a day-to-day basis and are not reflective
of in-year trading performance. Indicative criteria such as period to which
the item relates and external driven factors that are outside of the control
of the Group in combination with the magnitude and consistency of application
are also considered.
The amortisation charge relates to the acquisition of Spencer Aerospace. It
is charged on a straight-line basis and reflects a non-cash item for the
reported year. Site relocation costs relate to transfer of business
activities into new or existing cost competitive facilities to support the
Group's strategic initiatives. The US class action lawsuit relates to an
historic legal matter. The Group implemented a restructuring programme in
2019, which had residual activity in 2023 in response to further specific end
market conditions. Corporate undertakings relate to business acquisition and
disposal activities. None of these charges are reflective of in-year
performance. Therefore, they are excluded by the Board and Executive
Committee when measuring the operating performance of the businesses.
Year ended Year ended
2024
2023
£m
£m
Operating profit 40.3 37.9
Amortisation of intangible assets from acquisitions 1.6 2.2
Site relocation costs 3.5 0.1
US class action lawsuit 1.1 -
Net restructuring costs - 5.6
Adjusted operating profit 46.5 45.8
Profit before tax 27.8 22.8
rofit before tax
Adjustments to profit before tax as above 6.2 7.9
Corporate undertakings 1.2 4.7
Corporate undertakings - change in fair value on acquisition consideration (2.2) 2.9
Total Corporate undertakings (1.0) 7.6
Adjusted profit before tax 33.0 38.3
Site relocation costs
In 2024, £3.5m of site relocation costs were incurred (2023 - £0.1m) of
which £0.5m (2023 - £0.1m) related to the transfer of our Senior Flexonics
Crumlin business to a nearby high-tech facility in Wales to better showcase
its design, development, test and qualification capabilities in support of the
Group's strategic initiatives. The Group also recognised an impairment of
£1.9m of property, plant and equipment and costs of £1.1m related to the
transfer of existing business to other cost competitive facilities.
US class action lawsuit
In June 2022 a wage and hour class action lawsuit was filed against one
business based in California, USA. This lawsuit alleged violations of state
regulations concerning meal and rest breaks and related penalties covering the
period 2021 through the first half of 2024. Mediation took place in April
2024, resulting in a Company agreed settlement and related costs of £1.1m, of
which no payments have been made as at 31 December 2024. Court approval and
payment is expected by the end of the first half of 2025.
Net restructuring costs
In 2024 no restructuring costs were incurred in the Consolidated Income
Statement. In 2023, £5.6m was incurred, of which £2.4m related to
consultancy and other costs, £2.0m related to inventory impairment where
customer demand had decreased and £1.2m related to impairment of property,
plant and equipment to cover the risk where there were no alternative uses.
Net restructuring cash outflow was £0.5m (2023 - £2.1m).
Corporate undertakings
Net income associated with corporate undertakings was £1.0m (2023 - £7.6m
costs), of which £0.8m acquisition costs (2023 - £1.5m) and £2.2m income
from fair value changes in contingent consideration (2023 - £2.9m costs)
related to the acquisition of Spencer Aerospace in November 2022 and £0.4m
costs are associated with potential disposal and other corporate activities
(2023 - £3.2m). See Note 14 for further details on the financial impact of
the acquisition in 2024.
5. Tax charge
Year ended Year ended
2024
2023
£m £m
Current tax:
Current year 8.4 10.7
Adjustments in respect of prior periods- Americas uncertain tax positions - (7.0)
Adjustments in respect of prior periods- other (2.6) (4.3)
5.8 (0.6)
Deferred tax:
Current year (5.0) (5.8)
Adjustments in respect of prior periods 1.1 (1.9)
(3.9) (7.7)
Total tax charge/(credit) 1.9 (8.3)
The adjusted tax rate for the year was 10.0% charge (2023 - 11.0% credit),
being a tax charge of £3.3m (2023 - £4.2m credit) on adjusted profit before
tax of £33.0m (2023 - £38.3m profit). The adjusted tax charge benefits
from the recognition of a deferred tax asset of £2.2m in respect of
historical UK tax losses, net uncertain tax provision releases in the year
totalling £1.8m as well as enhanced R&D expenditure deductions in the US.
The UK tax rate of 25% has been applied to the UK profits for the period
(2023: 23.5%, being an effective tax rate as a result of the change in the UK
tax rate from 19% to 25% with effect from 1 April 2023). Deferred tax assets
and liabilities are measured at the rates that are expected to apply to the
year when the asset is realised or the liability is settled, based on tax
rates (and tax laws) that have been enacted or substantially enacted at the
Balance Sheet date. Taxation for other jurisdictions is calculated at the
rates prevailing in the respective jurisdictions.
The OECD Pillar II Globe Rules introduce a global minimum corporate tax rate,
initially at 15%, applicable to multinational enterprise (MNE) groups with
global revenue over €750m. All participating OECD members are required to
incorporate these rules into national legislation. On 20th June 2023 the UK
substantially enacted legislation to apply Pillar Two Globe rules into UK law
which will first apply to the Group from 1 January 2024. The Group has
provided £0.1m in the current year in respect of this liability.
The reported tax rate was 6.8% charge, being a tax charge of £1.9m on
reported profit before tax of £27.8m. This included £1.4m net tax credit
on items excluded from adjusted profit before tax. The 2023 reported tax
rate was 36.4% credit, being a tax credit of £8.3m on reported profit before
tax of £22.8m.
Cash tax paid was £7.4m (2023 - £5.6m) and is stated net of refunds received
in the UK of £1.2m (2023 - £2.8m in the US) of R&D tax incentives and
tax paid in prior periods, arising from the offset of tax losses against
taxable profits of prior periods.
6. Dividends
Year ended Year ended
2024
2023
£m
£m
Amounts recognised as distribution to equity holders in the period:
Final dividend for the year ended 31 December 2023 of 1.70p per share 7.0 4.1
(2022 - 1.00p)
Interim dividend for the year ending 31 December 2024 of 0.75p per share (2023 3.1 2.5
- 0.60p)
10.1 6.6
Proposed final dividend for the year ended 31 December 2024 of 1.65p per share 6.8 7.0
(2023 - 1.70p)
7. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Year ended Year ended
2024
2023
million
million
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 414.3 413.3
per share
Effect of dilutive potential ordinary shares:
Share options 9.2 11.7
Weighted average number of ordinary shares for the purposes of diluted 423.5 425.0
earnings per share
Year ended 2024 Year ended 2023
Earnings and earnings per share Earnings EPS Earnings EPS
£m pence £m pence
Profit for the period 25.9 6.25 31.1 7.52
Adjust:
Amortisation of intangible assets from acquisitions net of tax credit of 1.2 0.29 1.6 0.39
£0.4m (2023 - £0.6m credit)
Site relocation costs net of tax credit of £1.0m (2023 - £0.1m credit) 2.5 0.60 - -
US class action lawsuit net of tax credit of £0.3m (2023 - £nil) 0.8 0.20 - -
Net restructuring costs net of tax of £nil (2023 - £1.5m credit) - - 4.1 0.99
Corporate undertakings net of tax charge of £0.3m (2023 - £1.9m credit) (0.7) (0.17) 5.7 1.38
Adjusted earnings after tax 29.7 7.17 42.5 10.28
Earnings per share
- basic 6.25p 7.52p
- diluted 6.12p 7.32p
- adjusted 7.17p 10.28p
- adjusted and diluted 7.01p 10.00p
The denominators used for all basic, diluted and adjusted earnings per share
are as detailed in the table above.
The presentation of adjusted earnings per share, derived in accordance with
the table above, has been included to identify the performance of the Group
prior to the impact of amortisation of intangible assets from acquisitions,
site relocation costs, US class action lawsuit, net restructuring costs and
costs associated with corporate undertakings. The Board has a policy, which
was clarified in 2023, to separately disclose items it considers are outside
the normal course of management oversight and control on a day-to-day basis
and are not reflective of in-year trading performance. Indicative criteria
such as period to which the item relates and external driven factors that are
outside of the control of the Group in combination with the magnitude and
consistency of application are also considered. See Note 4 for further
details.
8. Goodwill
Goodwill increased by £2.1m during the year to £195.4m (2023 - £193.3m) due
to net foreign exchange differences.
9. Investment in joint venture
The Group has a 49% interest in Senior Flexonics Technologies (Wuhan) Limited,
a jointly controlled entity incorporated in China which was set up in 2012.
The Group's investment of £3.3m represents the Group's share of the joint
venture's net assets as at 31 December 2024 (2023 - £5.1m). The movement of
£1.8m in the Group's investment during the year comprises of £1.3m Group's
Share of profit more than offset by £3.0m dividend received and £0.1m
exchange difference.
10. Property, plant and equipment
During the period, the Group spent £41.5m (2023 - £33.7m) on the acquisition
of property, plant and equipment. The Group also disposed of property, plant
and equipment with a carrying value of £0.1m (2023 - £0.5m) for proceeds of
£0.1m (2023 - £0.7m). At 31 December 2024, right-of-use assets were
£65.5m (2023 - £64.4m).
11. Share capital
Share capital as at 31 December 2024 amounted to £41.9m. No shares were
issued during 2023 and 2024.
12. Notes to the Cash Flow Statement
a) Reconciliation of operating profit to net cash from operating activities
Year ended Year ended
2024
2023
£m
£m
Operating profit 40.3 37.9
Adjustments for:
Depreciation of property, plant and equipment 47.3 48.0
Amortisation of intangible assets 3.3 3.7
Profit on sale of fixed assets - (0.2)
Share-based payment charges 4.5 4.1
Pension contributions (0.8) (1.4)
Pension service and running costs 1.9 1.3
Corporate undertaking costs (2.3) (1.9)
Share of joint venture (1.3) (1.0)
Increase in inventories (26.6) (21.7)
Decrease/(increase) in receivables 4.0 (20.4)
Increase in payables and provisions 5.1 16.8
Restructuring impairment of property, plant and equipment and software - 1.2
US pension settlement - (0.9)
US class action lawsuit 1.1 -
Site relocation costs 1.9 -
Working capital and provisions currency movements (0.4) (1.3)
Cash generated by operations 78.0 64.2
Income taxes paid (7.4) (5.6)
Interest paid (21.2) (17.2)
Net cash from operating activities 49.4 41.4
b) Free cash flow
Free cash flow, a non-statutory item, enhances the reporting of the
cash-generating ability of the Group prior to corporate activity such as
acquisitions, restructuring, disposal activities, financing and transactions
with shareholders. It is used as a performance measure by the Board and
Executive Committee and is derived as follows:
Year ended Year ended
2024
2023
£m £m
Net cash from operating activities 49.4 41.4
Corporate undertaking costs 2.3 1.9
Net Restructuring cash paid 0.5 2.1
Site relocation costs 1.6 0.1
US pension settlement cash paid - 0.9
Interest received 6.6 4.3
Proceeds on disposal of property, plant and equipment 0.1 0.7
Purchases of property, plant and equipment (41.5) (33.7)
Purchase of intangible assets (1.7) (2.2)
Free cash flow 17.3 15.5
c) Analysis of net debt
At Net Cash Non Cash Exchange Other At 31
1 January
flow
movement
Lease
December
2024
movements
2024
£m £m £m £m £m £m
Cash and bank balances 47.6 (1.4) - (0.7) - 45.5
Overdrafts (1.8) 1.8 - - - -
Cash and cash equivalents 45.8 0.4 - (0.7) - 45.5
Debt due within one year - - (75.0) - - (75.0)
Debt due after one year (177.8) (20.2) 75.0 (0.9) - (123.9)
Lease liabilities ((1)) (71.8) 10.0 - (1.5) (12.9) (76.2)
Liabilities arising from financing activities (249.6) (10.2) - (2.4) (12.9) (275.1)
Total (203.8) (9.8) - (3.1) (12.9) (229.6)
( )
((1)) The change in lease liabilities in the year ended 31 December 2024 includes
lease rental payments of £13.4m (£3.4m of these payments relates to lease
interest), £1.5m exchange movement and £12.9m other movements which are
related to lease additions and modifications.
Year ended Year ended
2024
2023
Cash and Cash equivalents comprise: £m £m
Cash and bank balances 45.5 47.6
Overdrafts - (1.8)
Total 45.5 45.8
Cash and cash equivalents (which are presented as a single class of assets on
the face of the Consolidated Balance Sheet) comprise cash at bank and other
short-term highly liquid investments with a maturity of three months or less.
d) Analysis of working capital and provisions
Working capital comprises the following:
Year ended Year ended
2024
2023
£m £m
Inventories 236.0 207.5
Trade and other receivables 137.2 141.7
Trade and other payables (196.9) (188.4)
Working capital, including derivatives 176.3 160.8
Items excluded:
Foreign exchange contracts 2.7 0.1
Total 179.0 160.9
Working capital and provisions movement, net of restructuring items, a
non-statutory cash flow item, is derived as follows:
Year ended Year ended
2024
2023
£m £m
Increase in inventories (26.6) (21.7)
Decrease/(increase) in receivables 4.0 (20.4)
Increase in payables and provisions 5.1 16.8
Working capital and provisions movement, excluding currency effects (17.5) (25.3)
Items excluded:
Increase in restructuring related inventory impairment - (2.0)
Decrease/(increase) in net restructuring provision and other receivables 0.5 (0.3)
Total (17.0) (27.6)
13. Retirement benefit schemes
At 31 December 2024, aggregate retirement benefit liabilities of £6.8m (2023
- £8.0m) comprise the Group's US defined benefit pension funded schemes with
a total deficit of £1.4m (2023 - £2.8m) and other unfunded schemes, with a
deficit of £5.4m (2023 - £5.2m). The retirement benefit surplus of £43.5m
(2023 - £48.5m) comprises the Group's UK defined benefit pension funded
scheme.
The liability and asset values of the funded schemes have been assessed by
independent actuaries using current market values and discount rates.
14. Acquisition and other corporate activities
Acquisition of Spencer Aerospace Manufacturing, LLC.
On 25 November 2022, the Group acquired substantially all of the assets of
Spencer Aerospace Manufacturing, LLC, a leading manufacturer of highly
engineered, high-pressure hydraulic fluid fittings for use in commercial and
military aerospace applications, located in Valencia, California, USA.
At 31 December 2024, there is a maximum contingent consideration remaining of
$26.6m (£21.2m) potentially payable, in milestone amounts, dependent on the
financial performance of Spencer Aerospace for the period from 1 January 2024
to 31 December 2026. The most likely range of this remaining contingent
element is estimated between $21.6m and $26.6m. The fair value of $20.6m
(£16.5m), which includes discounting, has been recognised at 31 December
2024. The fair value of contingent consideration assumes continuing to
expand the relationship with Spencer's established customers and leveraging
Senior's strong relationships with OEMs, Tier 1 integrators and after market
customers around the world to exploit opportunities for Spencer Aerospace.
In 2024, the fair value change relates to a release of £3.6m for the 2025
earnout target not expected to be payable as a result of the impact of the
well publicised 737 MAX subdued volumes, partly offset by £1.4m interest
unwind (2023 - £2.9m interest unwind). In 2023, $26.6m (£23.9m) deferred
consideration net of working capital adjustment was paid. In 2024, £0.8m
costs (2023 - £1.5m) were incurred related to the acquisition.
The movement of deferred and contingent consideration payable and working
capital receivable since acquisition date is shown below:
Year ended Year ended
2024
2023
£m
£m
Balance at 1 January 29.0 52.0
Cash paid net of working capital adjustment (10.7) (23.9)
Change in fair value on acquisition consideration (2.2) 2.9
Effects of movements in exchange rates 0.4 (2.0)
Balance at 31 December 16.5 29.0
Amounts falling due within one year 13.0 10.5
Amounts falling due after one year 3.5 18.5
Contingent consideration balance at 31 December 16.5 29.0
Also in 2024, £0.4m costs associated with potential disposal and other
corporate activities were incurred (2023 - £3.2m).
15. Provisions
Provisions include warranty costs of £19.2m (2023 - £17.9m), restructuring
of £nil (2023 - £0.5m), and other provisions including contractual matters,
claims and legal costs that arise in the ordinary course of business of £6.7m
(2023 - £7.1m). The warranty costs include a provision of £11.8m (2023 -
£11.0m) related to one specific disputed commercial matter. The range of
reasonably possible outcomes considered by the Board is £6m, which reflects a
reasonably possible increase of £4m or decrease of £2m. No further details
on the matter are disclosed to avoid prejudicing the contractual position.
16. Contingent liabilities
The Group is subject to various claims which arise from time to time in the
course of its business including, for example, in relation to commercial
matters, product quality or liability, and tax audits. Where the Board has
assessed there to be a more likely than not outflow of economic benefits,
provision has been made for the best estimate as at 31 December 2024 (see Note
15). For all other matters, the Board has concluded that it is not more
likely than not that there will be an economic outflow of benefits. While
the outcome of some of these matters cannot be predicted with any certainty,
the Directors do not expect any of these arrangements, legal actions or
claims, after allowing for provisions already made where appropriate, to
result in significant loss to the Group.
17. Related party transaction
Barbara Jeremiah, Senior Independent Non-Executive Director and Chair of the
Remuneration Committee was appointed a non-executive director of Johnson
Matthey Plc with effect from 1 July 2023. Johnson Matthey Plc, a related
party of the Group, has been renting excess car parking space from one of the
Group's operating businesses on a rolling monthly basis. The lease contract
was in place prior to the acquisition of Thermal Engineering in 2013 by the
Group. In 2024, £0.07m car park rental was received (2023: £0.06m).
There are no outstanding amounts at 31 December 2024 (31 December 2023:
£nil).
The Group has also related party relationships with a number of pension
schemes and with Directors and Senior Managers of the Group.
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