Senior plc
Interim Results for the half-year ended 30 June
2024
Robust results, full-year
expectations unchanged
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FINANCIAL HIGHLIGHTS
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Half-year to 30
June
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change
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change
(constant
currency)
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(4)
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2024
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2023
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REVENUE
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£501.4m
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£482.3m
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+4%
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+7%
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OPERATING PROFIT
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£20.6m
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£20.8m
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-1%
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+2%
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ADJUSTED OPERATING PROFIT (1)
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£25.1m
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£22.9m
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+10%
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+13%
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ADJUSTED OPERATING MARGIN (1)
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5.0%
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4.7%
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+30 bps
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+30
bps
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PROFIT BEFORE TAX
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£13.2m
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£13.5m
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-2%
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+1%
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ADJUSTED PROFIT BEFORE TAX (1)
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£18.4m
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£17.6m
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+5%
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+8%
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BASIC EARNINGS PER SHARE
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2.63p
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2.80p
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-6%
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ADJUSTED EARNINGS PER SHARE (1)
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3.55p
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3.53p
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+1%
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INTERIM DIVIDEND PER SHARE
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0.75p
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0.60p
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+25%
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FREE CASH FLOW (2)
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£3.0m
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£(11.8)m
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+125%
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NET DEBT EXCLUDING CAPITALISED LEASES
(2)
-
30 June 2024 / 31 December 2023
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£156.1m
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£132.0m
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£24m
increase
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ROCE (3)
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7.3%
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6.3%
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+100bps
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Highlights
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Robust trading performance with sales up
7%(4) and adjusted operating profit up
13%(4)
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Continued growth in order book, book-to-bill
of 1.15
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Notable contract wins in both Aerospace and
Flexonics divisions
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Full-year outlook unchanged with good growth
anticipated for the full-year
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Interim dividend increased by 25% to
0.75p
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Commenting on
the results, David Squires, Group Chief Executive Officer of Senior
plc, said:
"Senior has delivered a robust set of results that are in line
with our expectations.
Our Aerospace revenue and profits have grown strongly
notwithstanding 737 MAX volumes being subdued as a consequence of
the ongoing situation at Boeing.
Our Flexonics Division continued to perform well,
maintaining double digit margins, albeit revenues and profits were
lower as land vehicle markets started to normalise and upstream oil & gas customers reduced inventory
levels.
For the full-year we still expect to maintain good performance
in Flexonics with H1 slightly higher than H2 due to a return to
more typical levels of land vehicle demand.
The Group's diversified position across key civil and defence
aircraft platforms, strong order intake and increasing aircraft
build rates are expected to drive good growth in Aerospace for the
full-year. Higher volumes, operational efficiency benefits
and improved pricing are expected to result in H2 performance being
higher than H1.
Overall, the Board's expectations of good growth for the Group
in 2024 are unchanged."
Further
information
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Bindi Foyle, Group Finance Director, Senior
plc
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+44 (0) 1923 714 725
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Tom Bindloss, Head of Treasury and Interim
Investor Relations, Senior plc
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+44 (0) 1923 714 743
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Richard Webster-Smith, FGS Global
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+44 (0) 7796 708 551
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Notes
This Release, together with other information
on Senior plc, can be found at: www.seniorplc.com
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(1)
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Adjusted operating profit and adjusted profit
before tax are stated before £0.8m amortisation of intangible
assets from acquisitions (H1 2023 - £1.1m), £nil net restructuring
costs (H1 2023 - £0.9m), £nil US pension settlement costs (H1 2023
- £0.1m), £2.6m site relocation costs (H1 2023 - £nil) and £1.1m US
class action lawsuit (H1 2023 - £nil). Adjusted profit before
tax is also stated before costs associated with corporate
undertakings of £0.7m (H1 2023 - £2.0m). A reconciliation of
adjusted operating profit to operating profit is shown in Note
4. Adjusted operating margin is the ratio of adjusted
operating profit to revenue.
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(2)
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See Note 12b and 12c for derivation of free
cash flow and of net debt, respectively.
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(3)
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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).
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(4)
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Constant currency is H1 2023 results
translated using H1 2024 average exchange rates.
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The following measures are used for the
purpose of assessing covenant compliance for the Group's borrowing
facilities:
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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 EBITDA
for businesses acquired and it is based on frozen GAAP (pre-IFRS
16). EBITDA for the 12-month period ending June 2024 was
£85.8m.
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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.
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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).
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The definition of adjusted items in the
Condensed Consolidated Income Statement is included in Note
4.
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The Group's principal foreign exchange
translation exposure is to the US Dollar. The average rate
applied in the translation of Income Statement and cash flow items
for H1 2024 was $1.26 (H1 2023 - $1.23) and the rate applied in the
translation of balance sheet items at 30 June 2024 was $1.26 (30
June 2023 - $1.27; 31 December 2023 - $1.27). Our current
assumption is that the average US Dollar to Pound Sterling exchange
rate for the full-year 2024 is $1.27.
Webcast
There will be a presentation on Monday 5
August 2024 at 09:30am BST accessible via a live webcast on
Senior's website at www.seniorplc.com/investors.
The webcast will be made available on the website for subsequent
viewing.
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 Interim Management Report ("IMR") has
been prepared solely to provide additional information to enable
shareholders to assess the Group's strategy and business objectives
and the potential for the strategy and objectives to be
fulfilled. It should not be relied upon by any other party or
for any other purpose.
This IMR 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 IMR 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.
INTERIM MANAGEMENT REPORT 2024
Senior has delivered a robust set of results
in the first half of 2024 that are in line with our
expectations.
The Group saw strong order intake during the
period, with a healthy book-to-bill ratio of 1.15 which underpins
our confidence in continued growth in 2024 and beyond. Both
Aerospace and Flexonics divisions recorded good order intake, with
some notable contract wins including from Airbus, Collins
Aerospace, Spirit AeroSystems and land vehicle OEMs (details in the
divisional reviews below), demonstrating the broad, diversified and
high-quality nature of our business.
For the first half of 2024, Group revenue
increased by 7% on a constant currency basis to £501.4m with growth
in the Aerospace Division and an anticipated reduction in the
Flexonics Division. Adverse exchange rates had an impact of
£12.3m to total sales.
In Aerospace, revenue increased 14%
year-on-year on a constant currency basis. The increase
reflected the ramp up in civil aircraft production rates
notwithstanding 737 MAX volumes being subdued following the Alaskan
Airlines incident in January 2024. We saw steady growth in
the defence market and a return to growth in sales to semiconductor
equipment customers (which is included in "Other Aerospace").
In Flexonics, revenue was down 6% compared to prior year, on
a constant currency basis. As expected, this was due to land
vehicle markets starting to normalise and a rebalancing of
inventory by our upstream oil & gas customers.
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 13% on a constant currency basis to £25.1m (H1
2023 - £22.9m). Adjusted operating margin increased by 30
basis points, to 5.0% for the half-year. The increase in
profitability for the Group was driven by improved profit in
Aerospace more than offsetting the expected volume-related
reduction in profit in Flexonics.
Overall, our Aerospace division
continues to make good progress operationally. Build rates on
most aircraft types have been increasing, with the obvious
exception of the Boeing 737 MAX due to the well documented issues.
Our business in Thailand is making good progress, having been
significantly affected over the past year by the fire at a key
supplier in February 2023. The supplier's factory has been
rebuilt and we were pleased to have made our first shipments to
customers in July using parts from the new factory. Volumes
from the new factory will increase steadily over coming months as
parts are requalified. Generally, we have seen our supply
chain stabilising as a result of specific actions we and our
suppliers have implemented. However, a few hotspots remain,
and we are mindful of comments from customers about continuing
pressures in some parts of the aerospace ecosystem.
We have been closely following the
discussions between Boeing and the FAA regarding the 737 MAX,
noting the understandably cautious approach to increasing
production volumes. Increases are taking longer than the
industry might have hoped at the start of the year. We have
agreed sensible production schedules with Boeing and other
customers that take account of likely build rates and inventory
levels. The operating businesses most exposed to the 737 MAX
programme were resourced for significantly higher build rates
coming into the year and have been protecting this resource,
particularly skilled labour, whilst awaiting clarity from customers
on demand for those products affected. This cost base is now
being realigned to the agreed production schedules.
The Group's adjusted profit before
tax increased by 5% to £18.4m (H1 2023 - £17.6m) reflecting higher
adjusted operating profit more than offsetting higher net interest
costs of £6.7m (H1 2023 - £5.3m). The adjusted tax charge was
£3.7m (H1 2023 - £3.0m). With the adjusted effective tax rate
increasing to 20.1% from 17.0%, adjusted earnings per share
increased 1% to 3.55 pence (H1 2023 - 3.53 pence).
Reported operating profit
was £20.6m (H1 2023 - £20.8m) and this
performance is further described in the Other Financial Information
section below. Profit before tax was £13.2m
(H1 2023 - £13.5m) and basic earnings per share
was 2.63 pence (H1 2023 - 2.80 pence).
The Group generated free cash flow of £3.0m (H1 2023 - £11.8m outflow) in the first half
of 2024. The improvement over prior year was primarily due to
lower working capital outflows and higher cash profits more than
offsetting higher investment in capital expenditure and higher tax
and interest payments. Cash outflows from working capital
were £19.8m (H1 2023 - £38.5m outflows) reflecting increased
trading in the period. Inventory was higher particularly in
Aerospace with planned investment to enable us to meet the strong
increase in demand from our customers and as a result of 737 MAX
production being lower than initially resourced for.
Receivables were higher as a result of revenue growth.
Gross capital expenditure was £16.9m (H1 2023 - £13.7m) which was
0.9x depreciation (excluding the impact of IFRS 16).
The Group experienced a net cash outflow of
£18.5m (H1 2023 - £18.1m) in the six months to June 2024, due to
free cash flow of £3.0m (H1 2023 - £11.8m outflow) offset primarily
by £10.7m contingent consideration paid for Spencer Aerospace
following its strong growth post acquisition, £7.0m dividends paid
and £3.0m purchase of shares held by the employee benefit
trust.
Net debt at the end of June 2024 was £233.1m
(including capitalised leases of £77.0m), an increase of £29.3m
from December 2023, after taking into account adverse currency
movements of £0.5m and a £10.3m increase for lease movements,
primarily for lease extensions at existing facilities. Period
end net debt to EBITDA was 1.8x and the headroom on
our committed borrowing facilities at 30 June 2024 was
£158.4m.
Return on capital employed ("ROCE") increased
by 100 basis points to 7.3% (H1 2023 - 6.3%). This
improvement in ROCE keeps the Group on track to deliver our Group
ROCE target of 13.5% over the medium-term.
Reflecting the confidence in the Group's
performance, financial position and future prospects, the Board has
approved an interim dividend of 0.75 pence per share (H1 2023 -
0.60 pence), representing 25% growth. This will be paid on
15 November 2024 to shareholders on the
register at close of business on 18 October
2024. In the medium-term, 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
Our Purpose is "we help engineer the
transition to a sustainable world for the benefit of all our
stakeholders". We do this by:
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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.
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Enabling our customers, who operate in some of
the hardest-to-decarbonise sectors, to transition to low-carbon and
clean energy solutions.
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Staying at the forefront of climate disclosure
and action by ensuring our own operations achieve our Net Zero
commitments.
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As we address these challenges with our
customers, we aim to "keep one foot in today, and one foot in
tomorrow". This enables us to be both practical about the
realities our customers are facing in today's world, and yet
deliver better designed, lighter or more efficient products that
help them move increasingly into a lower carbon future of
tomorrow.
Our extensive design expertise, intellectual
property and know-how, and technology, supports our strategic focus
on fluid conveyance and thermal management. This enables us
to develop and supply proprietary products, sub-systems and systems
for our customers' demanding applications across a range of diverse
and attractive end markets.
Our strategy of focusing on fluid conveyance
and thermal management is positioning Senior to offer pivotal
technologies for emissions reduction and environmental efficiency,
capabilities that continue to be highly relevant as the world
transitions towards a low-carbon economy. Not only are we
actively focused on new product offerings that support the
transition to a low-carbon world, but we are actively involved in
making conventional technology cleaner to bridge the gap between
both worlds.
Spencer Aerospace ("Spencer"), our
high-pressure fittings business, which was acquired in November
2022, has continued to grow strongly with sales up by over 40% in
H1 2024 compared to H1 2023. We continue to pursue multiple
new business opportunities, both in Spencer's traditional North
American home markets, and in Europe where the company is working
collaboratively with our French business, Senior Aerospace Ermeto.
This collaboration has offered Spencer a channel into
European markets and customers that they would not previously have
been able to access while at the same time broadening Senior's
product offering in Europe.
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 components. This market has high
barriers to entry and attractive returns. We are focussing
our efforts in this sector on broadening our product portfolio for
specific products such as flanges, couplings and fittings while
also expanding our production capacity to meet high levels of
customer demand.
Considered
and effective capital deployment
We understand the importance of considered and
effective capital deployment towards maximising shareholder value
creation. The Group has a medium-term pre-tax ROCE target of
at least 13.5% on a post IFRS 16 basis. Our strategy of
expanding Senior's high-quality fluid conveyance and thermal
management businesses remains a priority. We have a rigorous
appraisal process to evaluate the business case of all significant
investments.
The Group actively reviews its overall
portfolio of operating businesses and evaluates them in terms of
their strategic fit in order to grow returns, maximise Group
operating efficiency and optimise value for
shareholders.
We continue to progress strategic
options for our Aerostructures business including the potential
divestment of the business. Within the period,
revenue in Aerostructures grew strongly by 16% from £121.9m to
£141.2m on a constant currency basis. We have secured notable
new contract awards and important contract renewals bringing
pricing up-to-date from various customers, with multiple ongoing
discussions regarding attractive new business
opportunities.
Market Overview
In the first half of 2024, our core markets
across the Group were largely as expected.
Civil
Aerospace (46% of Group)
Air traffic continued to increase, with all
regions showing improvements in the six months to the end of June
2024. According to the International Air Transport
Association ("IATA"), the latest data showed that total demand,
measured in Revenue Passenger Kms (RPKs), increased by 13.4%
compared to the same period in 2023. Air traffic is forecast
to continue to grow as incomes increase, especially in developing
markets in Asia. Demand for new aircraft is forecast to grow
by 3-4%, driven by growth in air traffic and ongoing fleet
replacement.
During the first half of 2024, Airbus made two
adjustments to the production rates of its commercial aircraft
programmes. Firstly, it increased its target build rate for
the A350 from 10 per month in 2026 to 12 in 2028. Secondly,
for the A320 family of aircraft, it extended the date by which the
monthly build rate would reach 75 from 2026 to 2027, citing
concerns around engine and interiors supply. Increased
production rate targets for all its other commercial aircraft
programmes remain unchanged. Production rate targets are:
A220, 14 per month in 2026; A320 family, 75 per month in 2027;
A330, 4 per month in 2024; A350, 12 per month in 2028.
Following the Alaskan Airlines incident,
Boeing's build rates for the 737 MAX remain below the previously
stated target of 38 per month. Boeing plans to increase
production steadily to 38 per month by the end of 2024.
Boeing has previously said they are aiming for a build rate
of 50 per month in 2025/26. On the 787 programme production
rates were below five per month during H1 2024, according to
Boeing, and are expected to return to 5 per month by the year
end. They have previously said they expect to move gradually
to 10 per month by 2025/26. The 777X programme has entered
flight testing and entry into service is expected in
2025.
Embraer is forecasting that it will deliver
approximately 100 of its E2 jets per annum in 2026, up from 72 - 80
in 2024. Year to date, global business jet activity is down
by 2% year-on-year, however, longer-term trends in line with GDP
growth remain in place. Global deliveries of business jets
are anticipated to increase by 10% year-on-year in 2024 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 continue
to produce at 156 F-35 aircraft per year and expect to deliver
75-100 in the second half of 2024.
Other
Aerospace (Adjacent Markets) (8% of
Group)
Sales from our Aerospace operating businesses
into end markets outside of the civil aerospace and defence markets
are classified under "Other Aerospace" and include sales into the
semiconductor equipment, space and medical markets. Using our
world class bellows technology, we manufacture highly engineered
proprietary products to provide unique solutions for semiconductor
manufacturing equipment and medical device markets.
In the semiconductor sector global sales of
wafer fab equipment are forecast to grow by 3% in 2024 driven by
investment in China and demand for AI-related chips (Source:
Semi.org).
Land Vehicle
(20% of Group)
Demand in heavy-duty truck markets during the
first half was resilient, while the off-highway market was down and
the light vehicle market experienced mixed conditions.
According to Americas Commercial
Transportation ("ACT") research, North American heavy-duty truck
production grew by 4% in the first half of 2024 compared to H1
2023. At the time of our FY results in March 2024, ACT had
been expecting a market decline of 16% in 2024 but now are
predicting a decline of 9%. This improvement is due to the
strength in demand from private fleets, and the vocational and
Mexican truck markets. However, inventory levels of
heavy-duty trucks in North America have increased 41% year-on-year
and the order backlog is down 27% compared to H1 2023, according to
ACT.
S&P data shows that European heavy-duty
truck production was down 1% year-on-year in H1 2024 and production
for the full-year 2024 is forecast to be down by 14% when compared
to 2023.
Whilst it is too early to predict what will
happen in 2025, the global commercial vehicle market is expected to
grow at low single digit compound annual growth rate through the
cycle.
In the off-highway sector, demand for
construction, mining and utility vehicles was down during H1 due to
softer market conditions in both North America and Europe and
continued weakness in China. This softness was caused by
lower demand in the construction and agricultural equipment
sectors. It is expected to persist into H2, with demand in
these markets being down by up to 10% year-on-year in
2024.
Light vehicle production in the first half of
2024 benefitted from better conditions within the supply chain, but
this was offset by weak economic growth in Europe. According
to S&P, European light vehicle production was down 5% in the
first half of the year and is expected to be down by 5% for the
full year. The North American market is anticipated to be up
by 1% in 2024. In India, the other light-vehicle market to
which Senior has significant exposure, production in 2024 is
forecast to increase by 4%, driven by robust domestic
demand.
In the European EV sector in H1 2024 compared
to H1 2023, registrations of BEVs were up by 2%, of PHEVs up by 1%
and of hybrids up by 21% (Source: ACEA). Although near-term
growth rates have reduced, especially in some specific markets such
as Italy, Germany and the USA, the long-term outlook remains
positive as new environmental policies in Europe and the USA drive
adoption in the commercial vehicle sector and the economics of
passenger EVs continues to improve.
Power &
Energy (13% of Group)
In the first half of 2024, activity in the
downstream oil & gas sector has remained stable, focussing on
maintenance work by refinery companies in North America. In
the medium-term, investment in new refining capacity is most likely
to be in Asia and the Middle East, with the former driven by robust
demand growth and the latter by the availability of cheap natural
gas feedstock. In the upstream oil & gas sector, activity
in international and offshore markets continues to be robust,
however onshore in North America is subdued. Separately, the
Group is experiencing the effects of certain customers destocking
as they rebalance their inventory levels.
Growth in electricity demand is forecast to
continue increasing steadily, rising from 2.2% in 2023 to an
average 3.4% per annum in 2024-2026. In developing markets,
demand is being driven by economic growth, while in developed
markets, data centres, the development of AI technologies and the
reshoring of manufacturing is responsible. This demand will
be met by both renewable and conventional power generation, with
the latter playing a crucial role in offsetting the intermittency
of the former. As a zero-carbon electricity source, momentum
in nuclear power has continued building; further accelerated given
the importance of security of energy supply. The
International Atomic Energy Agency has noted that nuclear energy
has an important role to play in enabling countries to move away
from fossil fuels, achieve their net zero targets, and reinforce
climate resilience in energy systems.
Sustainability
Our dedication to sustainability is ingrained
in our core Values, forming the foundation of our Purpose.
Our Environmental, Social, and Governance ("ESG") programmes
are dynamic and continually advancing. Notably, we have
achieved class-leading "A" scores from CDP for both our disclosure
and actions on climate and our supplier engagement in 2023.
These achievements underscore our ongoing commitment to
sustainability, reflecting our proactive stance in addressing
environmental challenges and fostering positive social and
governance practices.
In May 2024, Senior received an award from
Safran, a major aerospace customer, recognising our leading
commitment to decarbonisation.
In the first half of 2024, we continue to make
good progress with our key sustainability metrics and
activities:
Environment
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We remain on track to achieve our Scope 1, 2
and 3 Science Based Target initiative ("SBTi") verified Near Term
Targets.
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CDP "A" rating for supplier
engagement.
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Safran Low Carbon Supplier competition
award.
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Social
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We undertook a Global Employee Engagement
Survey in the first half of 2024 and were pleased to see
improvements in the participation rate, engagement, and health
& wellbeing scores.
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Our Lost Time Injury Illness Rate shows a
reduction, with a figure of 0.27 in June 24 down from 0.32 in
December 2023.
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Currently, 57% 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
(29%) are from ethnic minority backgrounds.
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Governance
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As previously reported, two new non-financial
performance measures were introduced for 2024 (carbon reduction and
employee engagement) to the Company's annual bonus
targets.
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Adoption of an enhanced Group Fraud
Policy.
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Outlook
Senior has delivered a robust set
of results that are in line with our expectations.
For the full-year we still expect
to maintain good performance in Flexonics with H1 slightly higher
than H2. Robust demand in our downstream oil & gas and
nuclear business is helping to offset the ongoing rebalancing of
inventory by our upstream oil & gas customers and the return to
more typical levels of land vehicle market
demand.
The Group's diversified position
across key civil and defence aircraft platforms, strong order
intake and increasing aircraft build rates are expected to drive
good growth in Aerospace for the full-year. Regarding the 737
MAX, we have agreed sensible schedules with Boeing and other
customers that take into account ongoing production demand and
current customer inventory levels. Overall, higher volumes,
operational efficiency benefits and improved pricing are expected
to result in Aerospace H2 performance being higher than
H1.
At a Group level, we expect to
continue to largely mitigate the impact of lower 737 MAX production
with growth in other business. Overall, the Board's expectations of good growth for the Group
in 2024 are unchanged(1).
DAVID
SQUIRES
Group Chief Executive Officer
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(1)
|
Our current assumption is that the
average US Dollar to Pound Sterling exchange rate for the full-year
2024 is $1.27.
|
DIVISIONAL REVIEW
Aerospace Division
The Aerospace Division represents 67% (H1 2023
- 63%) of Group revenue and consists 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 H1 2023 results have been
translated using H1 2024 average exchange rates and on an adjusted
basis to exclude amortisation of intangible assets from
acquisitions, net restructuring costs, US pension settlement costs,
site relocation costs and US class action lawsuit. The
Division's operating results on a constant currency basis are
summarised below:
|
|
H1 2024
|
|
H1 2023
|
(1)
|
Change
|
|
Revenue
|
£338.7m
|
|
£296.6m
|
|
+14.2%
|
|
Adjusted operating profit
|
£16.2m
|
|
£11.6m
|
|
+39.7%
|
|
Adjusted operating margin
|
4.8%
|
|
3.9%
|
|
+90bps
|
|
(1)
|
H1 2023 results translated using H1
2024 average exchange rates - constant currency.
|
Divisional revenue increased
by £42.1m (14.2%) to £338.7m (H1 2023 - £296.6m) whilst adjusted
operating profit increased by £4.6m (39.7%) to £16.2m (H1 2023 -
£11.6m).
|
Revenue
Reconciliation
|
|
|
H1 2023 revenue
|
£296.6m
|
|
Civil aerospace
|
£35.8m
|
|
Defence
|
£3.2m
|
|
Other adjacent markets
|
£3.1m
|
|
H1 2024 revenue
|
£338.7m
|
Contract
Wins
The Aerospace Division has been awarded
several new or extended contracts this year from the following
customers:
|
-
|
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.
|
|
-
|
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.
|
|
-
|
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.
|
H1
Performance
Revenue in the Aerospace Division increased by
14.2% year-on-year on a constant currency
basis, benefiting from the overall recovery in demand across all
market sectors. The year-on-year increase reflected the ramp
up in civil aircraft production rates notwithstanding 737 MAX
volumes being subdued following the Alaskan Airlines incident in
January 2024. Defence and other adjacent markets (mainly the
semiconductor equipment market) also contributed to growth in the
division.
The civil aerospace sector had good growth
during the period with Senior's sales increasing by 18.2% compared
to prior year. Aircraft production rates were higher in H1
2024 compared to H1 2023, with the exception of Boeing 737 MAX,
driven particularly by Airbus's 320 single aisle family and
regional jets. 22% of civil aerospace sales were from
widebody aircraft in the first half of 2024, with the other 78%
sales being from single aisle, regional and business
jets.
Our high-pressure fittings business, Spencer
Aerospace, has continued to grow strongly with sales up by over 40%
in H1 2024 compared to H1 2023.
Total revenue from the defence sector
increased by £3.2m (5.1%) with higher sales to F35 and Eurofighter
programmes with legacy programmes remaining stable.
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 £3.1m (8.2%) as a result of the rebound in demand from the
semiconductor equipment market.
During the period, adjusted operating
profit increased by 39.7% to £16.2m (H1 2023 -
£11.6m) and the adjusted operating margin increased by 90 basis
points to 4.8% (H1 2023 - 3.9%).
Overall, the division continues to
make good progress operationally. Our business in Thailand is
now making good progress, having been significantly affected over
the past year by the fire at a key supplier in February 2023.
The supplier's factory has been rebuilt and our deliveries using
parts made in the new factory will increase steadily over coming
months as parts are requalified. Generally, we have seen our
supply chain stabilising as a result of specific actions we and our
suppliers have implemented. However, a few hotspots remain,
and we are mindful of comments from customers about continuing
pressures in some parts of the aerospace ecosystem.
Regarding the 737 MAX, increased
production volumes are taking longer than the industry might have
hoped at the start of the year. The operating businesses most
exposed to the 737 MAX programme were resourced for significantly
higher build rates coming into the year and have been protecting
this resource, particularly skilled labour, whilst awaiting clarity
from customers on demand for those products affected. Our
cost base is now being realigned as we have agreed sensible
production schedules with Boeing and other customers that take
account of likely build rates and inventory levels.
H2
Outlook
Currently we expect H2 sales to be slightly
higher than H1 as increases in most commercial aircraft build rates
are partially offset by the ongoing 737 MAX situation.
Overall, higher volumes, operational
efficiency benefits and improved pricing are expected to result in
Aerospace H2 performance being higher than H1.
Flexonics Division
The Flexonics Division represents 33% (H1 2023
- 37%) 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 H1 2023 results have been translated using H1 2024 average
exchange rates and on an adjusted basis to exclude site relocation
costs. The Division's operating results on a constant
currency basis are summarised below:
|
|
H1 2024
|
|
H1 2023
|
(1)
|
Change
|
|
Revenue
|
£163.6m
|
|
£173.8m
|
|
-5.9%
|
|
Adjusted operating profit
|
£17.9m
|
|
£19.5m
|
|
-8.2%
|
|
Adjusted operating margin
|
10.9%
|
|
11.2%
|
|
-30bps
|
|
(1)
|
H1 2023 results translated using
H1 2024 average exchange rates - constant currency.
|
Divisional revenue decreased by
£10.2m (-5.9%) to £163.6m (H1 2023 - £173.8m) and adjusted
operating profit decreased by £1.6m (-8.2%) to £17.9m (H1 2023 -
£19.5m).
|
Revenue Reconciliation
|
|
|
H1 2023 revenue
|
£173.8m
|
|
Land vehicle
|
£(2.9)m
|
|
Power & energy
|
£(7.3)m
|
|
H1 2024 revenue
|
£163.6m
|
Contract
Wins
The Flexonics Division has been awarded a
number of important contracts this year which include:
|
-
|
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 contract signed
with European OEM for heavy-duty truck with supply from multiple
Senior Flexonics operating businesses.
|
|
-
|
New contracts with passenger vehicle OEMs in
Europe with supply from our Olomouc business in the Czech
Republic.
|
|
-
|
Catofin contract with an Indian customer to
manufacture and supply expansion joints for a new Catofin
production facility supplied by our Pathway business in the
USA.
|
|
-
|
Numerous petrochemical, nuclear and other
industrial contracts awarded to our Pathway business in the
USA.
|
H1
Performance
Overall, and as expected, Senior's sales to
land vehicle markets decreased in the period due to demand starting
to normalise to more typical levels following a strong 2023.
Group sales to land vehicle markets decreased by 2.9% driven by
these softer market conditions 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
increased by £1.6m (5.1%) with market production increasing by
3.7%. Our North American off-highway sales decreased £2.7m
(-14.0%) reflecting lower demand from our customers. Sales to
other truck and off-highway regions, including Europe and India,
decreased by £0.7m (-2.7%). Group sales to passenger vehicle
markets decreased by £1.1m (-4.6%) in the year.
In the Group's power & energy markets
sales decreased by £7.3m (-10.0%) in the first half. Sales to
other power & energy markets increased by £1.9m (4.1%)
reflecting growth in sales to power generation, nuclear and
renewables industry customers. Sales to oil and gas customers
decreased by £9.2m (‑34.7%) as a result of lower demand due to
anticipated destocking in 2024 by certain upstream oil and gas
customers. Downstream oil & gas sales remained
healthy.
As expected, adjusted operating profit
decreased by £1.6m compared to prior period as a
result of lower sales. The divisional adjusted operating
margin remained in double digits at 10.9% (H1 2023
-11.2%).
H2
Outlook
As we enter H2, although land vehicle customer
demand has held up well, ACT research are now forecasting a decline
in the North American heavy-duty truck market of 9% in the
full-year 2024. S&P data shows that European heavy-duty
truck production for the full-year 2024 is forecast to be down by
14%. Currently, therefore, we expect H1 performance to be
slightly higher than H2 due to this return to more typical levels
of land vehicle market demand in the second half of the year and
ongoing rebalancing of inventory by our upstream
oil & gas customers, partially offset by robust demand
in our downstream oil and gas and nuclear business.
OTHER FINANCIAL INFORMATION
Operating
profit
Adjusted operating profit increased by £2.2m
(9.6%) to £25.1m (H1 2023 - £22.9m). Excluding the adverse
exchange rate impact of £0.7m, adjusted operating profit increased
by £2.9m (13.1%) on a constant currency basis. After
accounting for £0.8m amortisation of intangible assets from
acquisitions (H1 2023 - £1.1m), £2.6m site relocation costs (H1
2023 - £nil) and £1.1m US class action lawsuit (H1 2023 - £nil),
reported operating profit was £20.6m (H1 2023 - £20.8m). Net
restructuring costs and US pension settlement costs were £nil in
the first half of the year (H1 2023 - £0.9m and £0.1m
respectively). Reported operating profit in the Aerospace
Division was £12.0m (H1 2023 - £9.6m) and reported operating profit
in the Flexonics Division was £18.3m (H1 2023 - £20.8m).
Site relocation costs of £2.6m (H1 2023 -
£nil) include £2.3m related to the transfer of some manufacturing
from Senior Aerospace SSP's facility in California, US, to its cost
competitive facility in Mexico. The majority of this cost
relates to recognition of an impairment of £1.9m of property, plant
and equipment. The Group also incurred £0.3m costs related to
the transfer of our Senior Flexonics Crumlin business to a nearby
high-tech facility to better showcase its design, development, test
and qualification capabilities in support of the Group's strategic
initiatives.
Finance costs
and income
Finance costs, net of finance income and
before interest unwind of contingent consideration increased to
£6.7m (H1 2023 - £5.3m) and comprise IFRS 16 interest charge on
lease liabilities of £1.6m (H1 2023 - £1.5m), net finance income on
retirement benefits of £1.0m (H1 2023 - £1.0m) and net interest
charge of £6.1m (H1 2023 - £4.8m). This increase was driven
by higher underlying interest rates on variable rate debt and
higher levels of indebtedness in H1 2024 versus the prior
period.
Gross finance costs, including interest unwind
of contingent consideration were £11.6m (H1 2023 - £9.6m) and
finance income was £4.2m (H1 2023 - £2.9m).
Tax
charge
The adjusted tax rate for the period was 20.1%
(H1 2023 - 17.0%), being a tax charge of £3.7m (H1 2023 - £3.0m) on
adjusted profit before tax of £18.4m (H1 2023 - £17.6m). The
adjusted tax rate benefitted from enhanced deductions for R&D
expenditure in the USA as well as the geographical mix of taxable
profits. The reported tax rate was 17.4%, being a tax charge
of £2.3m on reported profit before tax of £13.2m. This
included £1.4m tax credit against items excluded from adjusted
profit before tax, of which £0.2m credit related to amortisation of
intangible assets from acquisitions, £0.7m related to site
relocation costs, £0.3m related to US class action lawsuit and
£0.2m related to corporate undertakings in the half-year. The
2023 half-year reported tax rate was 14.1%, being a tax charge of
£1.9m on reported profit before tax of £13.5m. This included
£1.1m tax credit against items excluded from adjusted profit before
tax, of which £0.3m credit related to amortisation of intangible
assets from acquisitions, £0.3m credit related to net restructuring
costs and a £0.5m credit related to corporate
undertakings.
Cash tax paid was £5.0m (H1 2023 - £2.4m) and
is stated net of refunds received of £nil (H1 2023 - £2.7m) of tax
paid in prior periods, arising from the offset of tax losses
against taxable profits of prior periods.
Earnings per
share
The weighted average number of shares, for the
purposes of calculating undiluted earnings per share, decreased to
413.8 million (H1 2023 - 413.9 million). The decrease arose
principally due to the purchase of shares held by the employee
benefit trust during 2023 and the first half of 2024. The
adjusted earnings per share was 3.55 pence (H1 2023 - 3.53
pence). Basic earnings per share was 2.63 pence (H1 2023 -
2.80 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 above, increased by 100 basis points to 7.3% (H1
2023 - 6.3%). The increase in ROCE was mainly a result of the
significant increase in the last twelve month period in adjusted
operating profit compared to prior half-year.
Cash
flow
The Group generated free cash flow of £3.0m in
H1 2024 (H1 2023 - £11.8m outflow) as set out in the table
below:
|
|
H1 2024
£m
|
H1 2023
£m
|
|
Operating profit
|
20.6
|
20.8
|
|
Amortisation of intangible assets from
acquisitions
|
0.8
|
1.1
|
|
Net restructuring costs
|
-
|
0.9
|
|
US pension settlement
|
-
|
0.1
|
|
Site relocation costs
|
2.6
|
-
|
|
US class action lawsuit
|
1.1
|
-
|
|
Adjusted operating profit
|
25.1
|
22.9
|
|
Depreciation (including amortisation of
software)
|
24.4
|
25.0
|
|
Working capital and provisions movement, net
of restructuring items
|
(19.8)
|
(38.5)
|
|
Pension contributions
|
(0.3)
|
(0.3)
|
|
Pension service and running costs
|
1.0
|
0.7
|
|
Other items(1)
|
1.4
|
0.4
|
|
Interest paid, net
|
(6.9)
|
(6.0)
|
|
Income tax paid, net
|
(5.0)
|
(2.4)
|
|
Capital expenditure
|
(16.9)
|
(13.7)
|
|
Sale of property, plant and
equipment
|
-
|
0.1
|
|
Free cash flow
|
3.0
|
(11.8)
|
|
Corporate undertakings
|
(12.0)
|
0.1
|
|
Net restructuring costs paid
|
(0.3)
|
(0.6)
|
|
US pension settlement
|
-
|
(0.8)
|
|
Site relocation costs paid
|
(0.7)
|
-
|
|
Dividend from Joint Venture
|
1.5
|
-
|
|
Dividends paid
|
(7.0)
|
(4.1)
|
|
Purchase of shares held by employee benefit
trust
|
(3.0)
|
(0.9)
|
|
Net cash flow
|
(18.5)
|
(18.1)
|
|
Effect of foreign exchange rate
changes
|
(0.5)
|
8.9
|
|
IFRS 16 non-cash additions and modifications
including acquisition
|
(10.3)
|
(2.4)
|
|
Change in net debt
|
(29.3)
|
(11.6)
|
|
Opening net debt
|
(203.8)
|
(178.9)
|
|
Closing net debt
|
(233.1)
|
(190.5)
|
|
(1)
|
Other items comprises £2.6m
share-based payment charges (H1 2023 - £1.4m), £(0.7m) profit on
share of joint venture (H1 2023 - £(0.6m)), £(0.5m) working capital
and provision currency movements (H1 2023 - £(0.3m)) and £nil
profit on sale of fixed assets (H1 2023 - £(0.1m)).
|
Capital
expenditure
Gross capital expenditure of £16.9m (H1 2023 -
£13.7m) was 0.9 times depreciation excluding the impact of IFRS 16
(H1 2023 - 0.7 times). The disposal of property, plant and
equipment was profit neutral (H1 2023 - £0.1m profit). For
the full-year 2024, capital investment is expected to be slightly
above depreciation (excluding the impact of IFRS 16). We are
prioritising new investment on growth projects where contracts have
been secured, important replacement equipment for current
production and sustainability related items.
Working
capital
Working capital balances increased by £19.7m
in the first half of 2024 to £180.6m (31 December 2023 - £160.9m),
after £0.2m adverse foreign currency movements. The
underlying increase reflects increased trading in the period.
Inventory was higher particularly in Aerospace with planned
investment to enable us to meet the strong increase in demand from
our customers and as a result of 737 MAX production being lower
than initially resourced for. Receivables were higher as a
result of revenue growth. In the first half of 2024, working
capital increased as a percentage of sales by 170 basis points to
18.4% (31 December 2023 - 16.7%). For the full-year 2024, we
currently expect working capital to be around 17% to 18% of sales.
Our medium-term target remains for working capital as a
percentage of sales to reduce towards the 15% level.
Retirement
benefit schemes
The retirement benefit surplus in respect of
the Group's UK defined benefit pension plan ("the UK Plan")
decreased by £1.8m to £46.7m (31 December 2023 - £48.5m) mainly due
to £2.3m net actuarial losses and £0.6m running costs partly offset
by £1.1m net interest income. Retirement benefit deficits in
respect of the US and other territories decreased by £0.2m to £7.8m
(31 December 2023 - £8.0m).
The 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 the full-year 2024 in the US funded plans is £0.8m
(£1.5m was paid in 2023).
Net
debt
Net debt which includes IFRS 16 lease
liabilities increased by £29.3m to £233.1m at 30 June 2024 (31
December 2023 - £203.8m). As noted in the cash flow above,
the Group generated net cash outflow of £18.5m (as defined in Note
12c), before £0.5m adverse foreign currency movements and £10.3m
non-cash changes in lease liabilities due to additions and
modifications.
Net debt excluding IFRS 16 lease liabilities
of £77.0m (31 December 2023 - £71.8m) increased by £24.1m to
£156.1m at 30 June 2024 (31 December 2023 - £132.0m), due to free
cash flow of £3.0m and £1.5m dividend received from the Joint
Venture more than offset by £10.7m contingent consideration paid
for Spencer Aerospace following the strong growth post acquisition,
£10.0m outflow for dividends and purchase of shares, £4.9m capital
repayment of leases, £2.3m net cash outflows related to corporate
undertakings, site relocation and restructuring and £0.7m adverse
foreign currency movements.
Funding and
Liquidity
At 30 June 2024, the Group held committed
borrowing facilities of £314.5m and the Group had headroom of
£158.4m under these committed facilities. In the first half,
the US RCF of $50m was extended by a year and will now mature in
June 2026. The weighted average maturity of the Group's
committed facilities is 3.0 years at 30 June 2024. Net debt
(defined in Note 12c) was £233.1m, including £77.0m of capitalised
leases which do not form part of the definition of debt under the
committed facilities and do not impact the Group's lending
covenants.
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 30 June 2024,
the Group's net debt to EBITDA was 1.8x and interest cover was
10.7x, both comfortably within covenant limits. For all
testing periods within the Going Concern Period (defined in Note
2), there is sufficient headroom to remain within the covenant
limits and the Group's committed borrowing facilities, even in a
severe but plausible downside scenario.
Going concern
basis
The Directors have, at the time of approving
these Condensed Consolidated Interim Financial Statements, a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the Going Concern
Period. Accordingly, they continue to adopt the going concern
basis of accounting in preparing these Condensed Consolidated
Interim Financial Statements, having undertaken a rigorous
assessment of the financial forecasts. Further details are
provided in Note 2.
Risks and
uncertainties
The principal risks and uncertainties faced by
the Group have been reviewed during the first half of 2024.
The Group's principal risk list as at 30 June 2024 and for the
remaining six months of the financial year has remained unchanged
from those set out in detail on pages 62 to 69 of the Annual Report
& Accounts 2023 (available at www.seniorplc.com).
Details regarding the mitigating actions the Board has established
in response to the risks and uncertainties can also be found on the
same pages of the Annual Report & Accounts 2023. These
mitigating actions are reviewed and updated regularly.
The first half of 2024 presented
additional headwinds flowing from some of the Group's key aerospace
customers who continue to wrestle with operational challenges.
The impact of demand and build rate variability, heightened
scrutiny of quality and safety conformance and the potential for
disruption resulting from merger and acquisition activity are being
carefully monitored with mitigating actions being deployed
accordingly.
The Group's risk and assurance
framework continues to serve as an effective foundation from which
to monitor and address our evolving business climate.
Additional information regarding the risk and assurance framework
is set out on pages 58 to 61 of the Annual Report and Accounts 2023
(available at www.seniorplc.com).
Responsibility statement of the
Directors in respect of the half-yearly financial
report
We confirm that to the best of our
knowledge:
|
1.
|
the condensed set of financial
statements has been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted for use by the UK;
|
|
2.
|
the Interim Management Report
herein includes a fair review of the information required
by:
a) DTR 4.2.7R of the
Disclosure Guidance and Transparency Rules, being an indication of
important events that have occurred during the first six months of
the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
and
b) DTR 4.2.8R of the
Disclosure Guidance and Transparency Rules, being related party
transactions that have taken place in the first six months of the
current financial year and that have materially affected the
financial position or performance of the entity during that period;
and any changes in the related party transactions described in the
last annual report that could do so.
|
By Order of the Board
|
David Squires
|
Bindi Foyle
|
|
Group Chief Executive Officer
|
Group Finance Director
|
|
2 August 2024
|
2 August 2024
|
INDEPENDENT REVIEW REPORT TO SENIOR PLC
Conclusion
We have been engaged by Senior plc ("the
Company") to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 30 June
2024 which comprises the Condensed Consolidated Income Statement,
the Condensed Consolidated Statement of Comprehensive Income, the
Condensed Consolidated Balance Sheet, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated Cash
Flow Statement, and the related explanatory notes.
Based on our review, nothing has come to our
attention that causes us to believe that the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 June 2024 is not prepared, in all material
respects, in accordance with IAS 34 Interim Financial Reporting as adopted
for use in the UK and the Disclosure Guidance and Transparency
Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA").
Basis for
conclusion
We conducted our review in accordance with
International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity ("ISRE
(UK) 2410") issued for use in the UK. A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and
applying analytical and other review procedures. We read the
other information contained in the half-yearly financial report and
consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
A review is substantially less in scope than
an audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusions
relating to going concern
Based on our review procedures, which are less
extensive than those performed in an audit as described in the
Basis for conclusion section of this report, nothing has come to
our attention that causes us to believe that the directors have
inappropriately adopted the going concern basis of accounting, or
that the directors have identified material uncertainties relating
to going concern that have not been appropriately
disclosed.
This conclusion is based on the review procedures
performed in accordance with ISRE (UK) 2410. However, future
events or conditions may cause the Group to cease to continue as a
going concern, and the above conclusions are not a guarantee that
the Group will continue in operation.
Directors'
responsibilities
The half-yearly financial report is the
responsibility of, and has been approved by, the directors.
The directors are responsible for preparing the half-yearly
financial report in accordance with the DTR of the UK
FCA.
As disclosed in note 2, the annual financial
statements of the Group are prepared in accordance with UK-adopted
international accounting standards.
The directors are responsible for preparing
the condensed set of financial statements included in the
half-yearly financial report in accordance with IAS 34 as adopted
for use in the UK.
In preparing the condensed set of
financial statements, the directors are responsible for assessing
the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Our
responsibility
Our responsibility is to express to the
Company a conclusion on the condensed set of financial statements
in the half-yearly financial report based on our review. Our
conclusion, including our conclusions relating to going concern,
are based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion section of
this report.
The purpose
of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in
accordance with the terms of our engagement to assist the Company
in meeting the requirements of the DTR of the UK FCA. Our
review has been undertaken so that we might state to the Company
those matters we are required to state to it in this report and for
no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the
Company for our review work, for this report, or for the
conclusions we have reached.
Mike
Barradell
for and on
behalf of KPMG LLP
Chartered
Accountants
5 Canada Square, London, E14 5GL
2 August 2024
Condensed Consolidated Income Statement
For the half-year ended 30 June
2024
|
|
Notes
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Year
ended
31 Dec
2023
|
|
|
|
£m
|
£m
|
£m
|
|
Revenue
|
3
|
501.4
|
482.3
|
963.5
|
|
Trading profit
|
|
19.9
|
20.2
|
36.9
|
|
Share of joint venture profit
|
9
|
0.7
|
0.6
|
1.0
|
|
Operating profit (1)
|
3
|
20.6
|
20.8
|
37.9
|
|
Finance income
|
|
4.2
|
2.9
|
10.1
|
|
Finance costs
|
|
(11.6)
|
(9.6)
|
(20.5)
|
|
Corporate undertakings
|
4
|
-
|
(0.6)
|
(4.7)
|
|
Profit before tax (2)
|
|
13.2
|
13.5
|
22.8
|
|
Tax (charge)/credit
|
5
|
(2.3)
|
(1.9)
|
8.3
|
|
Profit for
the period
|
|
10.9
|
11.6
|
31.1
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the parent
|
|
10.9
|
11.6
|
31.1
|
|
Earnings per share
|
|
|
|
|
|
Basic (3)
|
7
|
2.63p
|
2.80p
|
7.52p
|
|
Diluted (4)
|
7
|
2.57p
|
2.72p
|
7.32p
|
|
(1) Adjusted operating
profit
|
4
|
25.1
|
22.9
|
45.8
|
|
(2) Adjusted profit
before tax
|
4
|
18.4
|
17.6
|
38.3
|
|
(3) Adjusted earnings
per share
|
7
|
3.55p
|
3.53p
|
10.28p
|
|
(4) Adjusted and
diluted earnings per share
|
7
|
3.47p
|
3.43p
|
10.00p
|
Condensed Consolidated Statement of Comprehensive
Income
For the half-year ended 30 June
2024
|
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Year
ended
31 Dec
2023
|
|
|
|
£m
|
£m
|
£m
|
|
Profit for
the period
|
|
10.9
|
11.6
|
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 period
|
|
(2.9)
|
0.8
|
2.7
|
|
Reclassification adjustments for losses
included in profit
|
|
0.2
|
0.9
|
0.9
|
|
(Losses)/gains on foreign exchange contracts-
cash flow hedges
|
|
(2.7)
|
1.7
|
3.6
|
|
Exchange differences on translation of
overseas operations
|
|
(2.5)
|
(18.3)
|
(16.9)
|
|
Tax relating to items that may be
reclassified
|
|
0.6
|
(0.5)
|
(0.9)
|
|
|
|
(4.6)
|
(17.1)
|
(14.2)
|
|
Items that
will not be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
Actuarial losses on defined benefit pension
schemes
|
|
(2.0)
|
(3.3)
|
(2.6)
|
|
Tax relating to items that will not be
reclassified
|
|
0.5
|
0.8
|
0.6
|
|
|
|
(1.5)
|
(2.5)
|
(2.0)
|
|
Other comprehensive expense for the period,
net of tax
|
|
(6.1)
|
(19.6)
|
(16.2)
|
|
Total
comprehensive income/(expense) for the period
|
|
4.8
|
(8.0)
|
14.9
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the parent
|
|
4.8
|
(8.0)
|
14.9
|
Condensed Consolidated Balance Sheet
|
As at 30 June 2024
|
Notes
|
30 June
2024
|
30 June
2023
|
31 Dec
2023
|
|
|
|
£m
|
£m
|
£m
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
8
|
193.8
|
193.2
|
193.3
|
|
Other intangible assets
|
|
32.4
|
33.6
|
33.1
|
|
Investment in joint
venture
|
9
|
4.2
|
4.6
|
5.1
|
|
Property, plant and
equipment
|
10
|
284.0
|
283.1
|
284.7
|
|
Deferred tax assets
|
|
23.9
|
12.2
|
20.7
|
|
Retirement benefits
|
11
|
46.7
|
48.0
|
48.5
|
|
Trade and other
receivables
|
|
0.5
|
0.6
|
0.8
|
|
Total non-current assets
|
|
585.5
|
575.3
|
586.2
|
|
Current assets
|
|
|
|
|
|
Inventories
|
|
221.9
|
199.4
|
207.5
|
|
Current tax receivables
|
|
2.7
|
2.0
|
2.3
|
|
Trade and other
receivables
|
|
144.3
|
147.1
|
141.7
|
|
Cash and bank balances
|
12c)
|
36.4
|
35.7
|
47.6
|
|
Total current assets
|
|
405.3
|
384.2
|
399.1
|
|
Total assets
|
|
990.8
|
959.5
|
985.3
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
188.1
|
183.2
|
188.4
|
|
Current tax liabilities
|
|
7.7
|
18.1
|
10.0
|
|
Lease liabilities
|
12c)
|
13.0
|
11.2
|
12.4
|
|
Bank overdrafts and
loans
|
12c)
|
27.0
|
-
|
1.8
|
|
Provisions
|
13
|
12.0
|
16.1
|
10.5
|
|
Deferred and contingent
consideration
|
|
12.5
|
36.1
|
10.5
|
|
Total current
liabilities
|
|
260.3
|
264.7
|
233.6
|
|
Non-current liabilities
|
|
|
|
|
|
Bank and other loans
|
12c)
|
165.5
|
155.1
|
177.8
|
|
Retirement benefits
|
11
|
7.8
|
9.9
|
8.0
|
|
Deferred tax liabilities
|
|
9.6
|
4.7
|
7.0
|
|
Lease liabilities
|
12c)
|
64.0
|
59.9
|
59.4
|
|
Provisions
|
13
|
13.5
|
5.7
|
15.0
|
|
Contingent consideration
|
|
6.8
|
15.1
|
18.5
|
|
Others
|
|
9.2
|
6.2
|
8.9
|
|
Total non-current
liabilities
|
|
276.4
|
256.6
|
294.6
|
|
Total liabilities
|
|
536.7
|
521.3
|
528.2
|
|
Net assets
|
|
454.1
|
438.2
|
457.1
|
|
Equity
|
|
|
|
|
|
Issued share capital
|
14
|
41.9
|
41.9
|
41.9
|
|
Share premium account
|
|
14.8
|
14.8
|
14.8
|
|
Equity reserve
|
|
7.2
|
6.3
|
7.9
|
|
Hedging and translation
reserve
|
|
32.7
|
34.4
|
37.3
|
|
Retained earnings
|
|
367.1
|
351.8
|
368.0
|
|
Own Shares
|
|
(9.6)
|
(11.0)
|
(12.8)
|
|
Equity attributable to equity holders of the
parent
|
|
454.1
|
438.2
|
457.1
|
|
Total equity
|
|
454.1
|
438.2
|
457.1
|
Condensed Consolidated Statement of Changes in
Equity
For the half-year ended 30 June
2024
|
|
All
equity is attributable to equity holders of the parent
|
|
|
Issued
share
capital
|
Share
premium
account
|
Equity
reserve
|
Hedging
reserve
|
Translation
reserve
|
Retained
earnings
|
Own
shares
|
Total
equity
|
|
|
£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
|
-
|
-
|
-
|
-
|
-
|
10.9
|
-
|
10.9
|
|
Losses on foreign exchange
contracts- cash flow hedges
|
-
|
-
|
-
|
(2.7)
|
-
|
-
|
-
|
(2.7)
|
|
Exchange differences on
translation of overseas operations
|
-
|
-
|
-
|
-
|
(2.5)
|
-
|
-
|
(2.5)
|
|
Actuarial losses on defined
benefit pension schemes
|
-
|
-
|
-
|
-
|
-
|
(2.0)
|
-
|
(2.0)
|
|
Tax relating to components of
other comprehensive income
|
-
|
-
|
-
|
0.6
|
-
|
0.5
|
-
|
1.1
|
|
Total comprehensive (expense)/income for the
period
|
-
|
-
|
-
|
(2.1)
|
(2.5)
|
9.4
|
-
|
4.8
|
|
Share-based payment
charge
|
-
|
-
|
2.6
|
-
|
-
|
-
|
-
|
2.6
|
|
Tax relating to share-based
payments
|
-
|
-
|
-
|
-
|
-
|
(0.4)
|
-
|
(0.4)
|
|
Purchase of shares held by
employee benefit trust
|
-
|
-
|
-
|
-
|
-
|
-
|
(3.0)
|
(3.0)
|
|
Use of shares held by employee
benefit trust
|
-
|
-
|
-
|
-
|
-
|
(6.2)
|
6.2
|
-
|
|
Transfer to retained
earnings
|
-
|
-
|
(3.3)
|
-
|
-
|
3.3
|
-
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(7.0)
|
-
|
(7.0)
|
|
Balance at 30 June 2024
|
41.9
|
14.8
|
7.2
|
(38.2)
|
70.9
|
367.1
|
(9.6)
|
454.1
|
|
|
All
equity is attributable to equity holders of the parent
|
|
|
Issued
share
capital
|
Share
premium
account
|
Equity
reserve
|
Hedging
reserve
|
Translation reserve
|
Retained
earnings
|
Own
shares
|
Total
equity
|
|
|
£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
|
-
|
-
|
-
|
-
|
-
|
11.6
|
-
|
11.6
|
|
Gains on foreign exchange
contracts- cash flow hedges
|
-
|
-
|
-
|
1.7
|
-
|
-
|
-
|
1.7
|
|
Exchange differences on
translation of overseas operations
|
-
|
-
|
-
|
-
|
(18.3)
|
-
|
-
|
(18.3)
|
|
Actuarial losses on defined
benefit pension schemes
|
-
|
-
|
-
|
-
|
-
|
(3.3)
|
-
|
(3.3)
|
|
Tax relating to components of
other comprehensive income
|
-
|
-
|
-
|
(0.5)
|
-
|
0.8
|
-
|
0.3
|
|
Total comprehensive (expense)/income for the
period
|
-
|
-
|
-
|
1.2
|
(18.3)
|
9.1
|
-
|
(8.0)
|
|
Share-based payment
charge
|
-
|
-
|
1.4
|
-
|
-
|
-
|
-
|
1.4
|
|
Tax relating to share-based
payments
|
-
|
-
|
0.4
|
-
|
-
|
-
|
-
|
0.4
|
|
Purchase of shares held by
employee benefit trust
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.9)
|
(0.9)
|
|
Use of shares held by employee
benefit trust
|
-
|
-
|
-
|
-
|
-
|
(1.6)
|
1.6
|
-
|
|
Transfer to retained
earnings
|
-
|
-
|
(1.9)
|
-
|
-
|
1.9
|
-
|
-
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
-
|
(4.1)
|
-
|
(4.1)
|
|
Balance at 30 June 2023
|
41.9
|
14.8
|
6.3
|
(37.6)
|
72.0
|
351.8
|
(11.0)
|
438.2
|
Condensed Consolidated Cash Flow Statement
For the half-year ended 30 June
2024
|
|
Notes
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Year
ended
31 Dec
2023
|
|
|
|
£m
|
£m
|
£m
|
|
Net cash
generated/(used in) from operating activities
|
12a)
|
14.4
|
(1.7)
|
41.4
|
|
Investing
activities
|
|
|
|
|
|
Interest received
|
|
3.2
|
1.9
|
4.3
|
|
Proceeds on disposal of property, plant and
equipment
|
|
-
|
0.1
|
0.7
|
|
Purchases of property, plant and
equipment
|
|
(16.3)
|
(12.9)
|
(33.7)
|
|
Purchases of intangible assets
|
|
(0.6)
|
(0.8)
|
(2.2)
|
|
Acquisition of Spencer
|
|
(10.7)
|
0.3
|
(23.9)
|
|
Dividend from joint venture
|
|
1.5
|
-
|
-
|
|
Net cash used
in investing activities
|
|
(22.9)
|
(11.4)
|
(54.8)
|
|
Financing
activities
|
|
|
|
|
|
Dividends paid
|
|
(7.0)
|
(4.1)
|
(6.6)
|
|
New loans
|
|
98.3
|
84.1
|
136.2
|
|
Repayment of borrowings
|
|
(83.8)
|
(66.8)
|
(96.2)
|
|
Purchase of shares held by employee benefit
trust
|
|
(3.0)
|
(0.9)
|
(5.6)
|
|
Repayment of lease liabilities
|
|
(4.9)
|
(5.0)
|
(10.2)
|
|
Net cash
(used)/generated in financing activities
|
|
(0.4)
|
7.3
|
17.6
|
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(8.9)
|
(5.8)
|
4.2
|
|
Cash and cash
equivalents at beginning of period
|
|
45.8
|
42.7
|
42.7
|
|
Effect of foreign exchange rate
changes
|
|
(0.5)
|
(1.2)
|
(1.1)
|
|
Cash and cash
equivalents at end of period
|
12c)
|
36.4
|
35.7
|
45.8
|
Notes to the Condensed Consolidated Interim Financial
Statements
1. General
information
These Condensed Consolidated Interim Financial
Statements of Senior plc ("the Group"), which were approved by the
Board of Directors on 2 August 2024, have been reviewed by KPMG
LLP, the Group's auditor, whose report is set out after the
Directors' Responsibility Statement.
The comparative figures for the year ended 31
December 2023 do not constitute the Group's statutory accounts for
2023 as defined in Section 434(3) of the Companies Act 2006.
Statutory accounts for 2023 have been delivered to the Registrar of
Companies. The auditor's report on those accounts was
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.
2. Accounting
policies
Basis of
preparation
These Condensed Consolidated Interim Financial
Statements have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and with IAS
34 "Interim Financial Reporting" as adopted for use by the
UK.
The Annual Financial Statements of the Group
for the year ending 31 December 2024 will be prepared in accordance
with UK-adopted international accounting standards. As
required by the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, these Condensed Consolidated Interim
Financial Statements have been prepared by applying the accounting
policies and presentation that were applied in the preparation of
the published Annual Financial Statements of the Group as at and
for the year ended 31 December 2023, which were prepared in
accordance with UK-adopted international accounting
standards.
These Condensed Consolidated Interim Financial
Statements do not include all the information required for full
Annual Financial Statements and should be read in conjunction with
the Annual Financial Statements of the Group as at and for the year
ended 31 December 2023.
Going
Concern
The Directors have, at the time of approving
these Condensed Consolidated Interim Financial Statements, a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future, being
a period of at least 12 months from this reporting date (the "Going
Concern Period"). Accordingly, they continue to adopt the
going concern basis of accounting in preparing these Condensed
Consolidated Interim Financial Statements, having undertaken a
rigorous assessment of the financial forecasts.
The Board has considered projections,
including severe but plausible downsides covering the Going Concern
Period based on the experiences over recent years, including the
robust trading performance in the first half of 2024. These
projections are borne out of extensive scenario testing, based on a
variety of end market assumptions, while taking account of
appropriate mitigating actions within the direct control of the
Group.
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 30 June 2024,
the Group's net debt to EBITDA was 1.8x and interest cover was
10.7x, both comfortably within covenant limits. The Group's
liquidity headroom at 30 June 2024 was £158.4m. For all
testing periods within the Going Concern Period, there is
sufficient headroom to remain within the covenant limits and the
Group's committed borrowing facilities, even in a severe but
plausible downside scenario.
Based on the above assessment, the Board has
concluded that the Group will continue to have adequate financial
resources to realise its assets and discharge its liabilities as
they fall due over the Going Concern Period. Accordingly, the
Directors have formed the judgement that it is appropriate to
prepare these Condensed Consolidated Interim Financial Statements
on the going concern basis.
New policies
and standards
The accounting policies, presentation and
methods of computation adopted in the preparation of these
Condensed Consolidated Interim Financial Statements are consistent
with those followed in the preparation of the Group's Annual
Financial Statements for the year ended 31 December 2023, which
were prepared in accordance with UK-adopted international
accounting standards.
At the date of authorisation of these
Condensed Consolidated Interim Financial Statements, several new
standards and amendments to existing standards have been issued,
some of which are effective. None of these standards and
amendments have a material impact on the Group.
The preparation of the Condensed Consolidated
Interim Financial Statements requires management to make judgments,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income
and expense. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The
Group's latest Annual Financial Statements for the year ended 31
December 2023, which are available via Senior's website www.seniorplc.com, set out the key
sources of estimation uncertainty and the critical judgements that
were made in preparing those Financial Statements.
3. Segmental
analysis
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
/ central
costs
|
Total
|
Aerospace
|
Flexonics
|
Eliminations
/ central
costs
|
Total
|
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Half-year
ended
30 June
2023
|
Half-year
ended
30 June
2023
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
External revenue
|
338.0
|
163.4
|
-
|
501.4
|
303.8
|
178.5
|
-
|
482.3
|
|
Inter-segment revenue
|
0.7
|
0.2
|
(0.9)
|
-
|
0.3
|
0.1
|
(0.4)
|
-
|
|
Total revenue
|
338.7
|
163.6
|
(0.9)
|
501.4
|
304.1
|
178.6
|
(0.4)
|
482.3
|
|
Adjusted trading profit
|
16.2
|
17.9
|
(9.7)
|
24.4
|
11.6
|
20.2
|
(9.5)
|
22.3
|
|
Share of joint venture
profit
|
-
|
0.7
|
-
|
0.7
|
-
|
0.6
|
-
|
0.6
|
|
Adjusted operating
profit
|
16.2
|
18.6
|
(9.7)
|
25.1
|
11.6
|
20.8
|
(9.5)
|
22.9
|
|
Amortisation of intangible assets
from acquisitions
|
(0.8)
|
-
|
-
|
(0.8)
|
(1.1)
|
-
|
-
|
(1.1)
|
|
Net restructuring costs
|
-
|
-
|
-
|
-
|
(0.9)
|
-
|
-
|
(0.9)
|
|
US pension settlement
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.1)
|
(0.1)
|
|
Site relocation costs
|
(2.3)
|
(0.3)
|
-
|
(2.6)
|
-
|
-
|
-
|
-
|
|
US class action lawsuit
|
(1.1)
|
-
|
-
|
(1.1)
|
-
|
-
|
-
|
-
|
|
Operating profit
|
12.0
|
18.3
|
(9.7)
|
20.6
|
9.6
|
20.8
|
(9.6)
|
20.8
|
|
Finance income
|
|
|
|
4.2
|
|
|
|
2.9
|
|
Finance costs
|
|
|
|
(11.6)
|
|
|
|
(9.6)
|
|
Corporate undertakings
|
|
|
|
-
|
|
|
|
(0.6)
|
|
Profit before tax
|
|
|
|
13.2
|
|
|
|
13.5
|
|
Tax charge
|
|
|
|
(2.3)
|
|
|
|
(1.9)
|
|
Profit after tax
|
|
|
|
10.9
|
|
|
|
11.6
|
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.
|
|
30 June
2024
|
30 June
2023
|
31 Dec
2023
|
|
Assets
|
£m
|
£m
|
£m
|
|
Aerospace
|
664.6
|
637.7
|
646.5
|
|
Flexonics
|
212.4
|
219.0
|
215.4
|
|
Segment assets for reportable
segments
|
877.0
|
856.7
|
861.9
|
|
Unallocated
|
|
|
|
|
Central
|
4.1
|
4.6
|
4.0
|
|
Cash
|
36.4
|
35.7
|
47.6
|
|
Deferred and current tax
|
26.6
|
14.2
|
23.0
|
|
Retirement benefits
|
46.7
|
48.0
|
48.5
|
|
Others
|
-
|
0.3
|
0.3
|
|
Total assets per Consolidated Balance
Sheet
|
990.8
|
959.5
|
985.3
|
|
|
30 June
2024
|
30 June
2023
|
31 Dec
2023
|
|
Liabilities
|
£m
|
£m
|
£m
|
|
Aerospace
|
192.8
|
173.1
|
183.1
|
|
Flexonics
|
81.6
|
82.8
|
79.9
|
|
Segment liabilities for reportable
segments
|
274.4
|
255.9
|
263.0
|
|
Unallocated
|
|
|
|
|
Central
|
15.1
|
18.0
|
22.2
|
|
Debt
|
192.5
|
155.1
|
179.6
|
|
Deferred and current tax
|
17.3
|
22.8
|
17.0
|
|
Retirement benefits
|
7.8
|
9.9
|
8.0
|
|
Deferred and contingent
consideration
|
19.3
|
51.2
|
29.0
|
|
Others
|
10.3
|
8.4
|
9.4
|
|
Total liabilities per Consolidated Balance
Sheet
|
536.7
|
521.3
|
528.2
|
Total revenue is disaggregated by market
sectors as follows:
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Year
ended
31 Dec
2023
|
|
|
£m
|
£m
|
£m
|
|
Civil Aerospace
|
232.0
|
201.4
|
410.5
|
|
Defence
|
65.6
|
63.8
|
132.6
|
|
Other
|
41.1
|
38.9
|
73.4
|
|
Aerospace
|
338.7
|
304.1
|
616.5
|
|
|
|
|
|
|
Land Vehicles
|
97.8
|
104.0
|
201.7
|
|
Power & Energy
|
65.8
|
74.6
|
146.3
|
|
Flexonics
|
163.6
|
178.6
|
348.0
|
|
|
|
|
|
|
Eliminations
|
(0.9)
|
(0.4)
|
(1.0)
|
|
Total
revenue
|
501.4
|
482.3
|
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 cost, US pension settlement,
site relocation costs, US class action lawsuit and costs associated
with corporate undertakings. The Board has a policy 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. The Group implemented a restructuring programme in
2019, which had residual activity in 2023 in response to further
specific end market conditions. The US pension settlement
related to closure of a US defined benefit scheme in 2023.
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. 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.
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Year
ended
31 Dec
2023
|
|
|
£m
|
£m
|
£m
|
|
Operating profit
|
20.6
|
20.8
|
37.9
|
|
Amortisation of intangible assets from
acquisitions
|
0.8
|
1.1
|
2.2
|
|
Net restructuring cost
|
-
|
0.9
|
5.6
|
|
US pension settlement
|
-
|
0.1
|
-
|
|
Site relocation costs
|
2.6
|
-
|
0.1
|
|
US class action lawsuit
|
1.1
|
-
|
-
|
|
Adjusted operating profit
|
25.1
|
22.9
|
45.8
|
|
|
|
|
|
|
Profit before tax
|
13.2
|
13.5
|
22.8
|
|
Adjustments to profit before tax as
above
|
4.5
|
2.1
|
7.9
|
|
Corporate undertakings
|
-
|
0.6
|
4.7
|
|
Corporate undertakings - discount
unwind
|
0.7
|
1.4
|
2.9
|
|
Total Corporate undertakings
|
0.7
|
2.0
|
7.6
|
|
Adjusted profit before tax
|
18.4
|
17.6
|
38.3
|
Site
relocation costs
In the first half of 2024, £0.3m of site
relocation costs (H1 2023 - £nil) 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 £0.4m 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 made as at 30
June 2024. Court approval and payment is expected by the end
of the first half of 2025.
Corporate
undertakings
In the first half of 2024, the Group recorded
£0.7m relating to interest unwind of Spencer acquisition contingent
consideration. In the first half of 2023, the Group recorded
£2.0m costs related to the acquisition of Spencer, of which £1.4m
is interest unwind of deferred and contingent consideration and
£0.6m is unwind of initial fair value uplift and other corporate
costs.
5. Tax
charge
|
|
Half-year
ended
30 June
2024
£m
|
Half-year
ended
30 June
2023
£m
|
|
Current tax:
|
|
|
|
Current year charge
|
2.0
|
3.0
|
|
Irrecoverable withholding tax
|
0.2
|
0.2
|
|
|
2.2
|
3.2
|
|
Deferred tax:
|
|
|
|
Current year charge/(credit)
|
0.1
|
(1.3)
|
|
|
0.1
|
(1.3)
|
|
Total tax charge
|
2.3
|
1.9
|
Tax for the half-year ended 30 June 2024 is
calculated at 17.4% (H1 2023: 14.1%) on the profit before tax,
representing the half-year allocation of the estimated weighted
average annual tax rate expected for the full financial year in
accordance with IAS 34. The estimated tax rate is weighted to
reflect the tax impact of significant events taking place during
the interim period.
The UK tax rate of 25% has been applied to the
UK profits for the period (H1 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).
The group is paying close attention to
proposals under Pillar 2 of the OECD's Base Erosion Profit Shifting
(BEPS) project and the impact this may have on the group's future
tax position. Pillar 2 rules were substantively enacted in
the UK on 20 June 2023, with application from 1 January 2024.
The group does not expect material top-up
tax to be payable in any jurisdiction.
We have applied the guidance contained in
International Tax Reform - Pillar Two Model Rules (Amendments to
IAS 12) released on 23 May 2023 that provides for a temporary
mandatory exception from deferred tax accounting for Pillar
2.
6.
Dividends
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
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 (2022: 1.00p) per share
|
7.0
|
4.1
|
|
Interim dividend for the year ending 31
December 2024 of 0.75p (2023: 0.60p) per share
|
3.1
|
2.5
|
The interim dividend was approved by the Board
of Directors on 2 August 2024 and has not been included as a
liability in these Condensed Consolidated Interim Financial
Statements, in accordance with the requirements of IFRS.
7. Earnings
per share
The calculation of the basic and diluted
earnings per share is based on the following data:
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
Number of shares
|
million
|
million
|
|
Weighted average number of ordinary shares for
the purposes of basic earnings per share
|
413.8
|
413.9
|
|
Effect of dilutive potential ordinary
shares:
|
|
|
|
Share options
|
10.0
|
12.2
|
|
Weighted average number of ordinary shares for
the purposes of diluted earnings per share
|
423.8
|
426.1
|
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
Half-year
ended
30 June
2023
|
|
|
Earnings
|
EPS
|
Earnings
|
EPS
|
|
Earnings and earnings per share
("EPS")
|
£m
|
Pence
|
£m
|
Pence
|
|
Profit for the period
|
10.9
|
2.63
|
11.6
|
2.80
|
|
Adjust:
|
|
|
|
|
|
Amortisation of intangible assets from
acquisitions net of £0.2m tax credit (H1 2023 - £0.3m
credit)
|
0.6
|
0.14
|
0.8
|
0.20
|
|
Net restructuring cost net of £nil tax (H1
2023 - £0.3m credit)
|
-
|
-
|
0.6
|
0.15
|
|
US pension settlement net of £nil tax (H1
2023: £nil)
|
-
|
-
|
0.1
|
0.02
|
|
Corporate undertakings net of £0.2m tax credit
(H1 2023 - £0.5m credit)
|
0.5
|
0.12
|
1.5
|
0.36
|
|
Site relocation costs net of £0.7m tax credit
(H1 2023 - £nil)
|
1.9
|
0.46
|
-
|
-
|
|
US class action lawsuit net of £0.3m tax
credit (H1 2023 - £nil)
|
0.8
|
0.20
|
-
|
-
|
|
Adjusted earnings after tax
|
14.7
|
3.55
|
14.6
|
3.53
|
|
Earnings per share
|
|
|
|
|
|
- basic
|
|
2.63p
|
|
2.80p
|
|
- diluted
|
|
2.57p
|
|
2.72p
|
|
- adjusted
|
|
3.55p
|
|
3.53p
|
|
- adjusted and diluted
|
|
3.47p
|
|
3.43p
|
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, net
restructuring cost, US pension settlement, site relocation costs,
US class action lawsuit and corporate undertakings.
The Board has a policy 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
The change in goodwill from £193.3m at 31
December 2023 to £193.8m at 30 June 2024 reflects an increase of
£0.5m due to foreign exchange differences.
The Group tests goodwill annually for
impairment or more frequently if there are indications that
goodwill might be impaired. No such indicators have been
identified at 30 June 2024.
9. Investment
in joint venture
The Group has a 49% interest in Senior
Flexonics Technologies (Wuhan) Limited, a jointly controlled entity
incorporated in China. The Group's investment of £4.2m (30
June 2023: £4.6m; 31 December 2023: £5.1m) represents the Group's
share of the joint venture's net assets as at 30 June 2024.
During the first half of 2024, the Group received £1.5m
dividend from the joint venture (H1 2023 - £nil).
10. Property,
plant and equipment
During the period, the Group invested £16.3m
(H1 2023: £12.9m) on the acquisition of property, plant and
equipment (excluding right-of-use assets). The Group also
disposed of machinery with a carrying value of £nil (H1 2023: £nil)
for proceeds of £nil (H1 2023: £0.1m).
At 30 June 2024, right-of-use assets were
£67.3m (30 June 2023: £63.8m; 31 December 2023: £64.4m).
Right-of-use asset depreciation was £5.2m for the six months
ending 30 June 2024 (H1 2023: £5.3m).
11.
Retirement benefit schemes
Aggregate retirement benefit liabilities of
£7.8m (30 June 2023: £9.9m; 31 December 2023: 8.0m) comprise the
Group's US defined benefit pension funded schemes with a total
deficit of £2.7m (30 June 2023: £4.7m; 31 December 2023: £2.8m) and
other unfunded schemes, with a deficit of £5.1m (30 June 2023:
£5.2m; 31 December 2023:
£5.2m).
The retirement benefit surplus of £46.7m (30
June 2023: £48.0m; 31 December 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.
12. Notes to
the Cash Flow Statement
a) Reconciliation of operating profit to net
cash from operating activities
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Operating profit
|
20.6
|
20.8
|
|
Adjustments for:
|
|
|
|
Depreciation of property, plant and equipment
|
23.5
|
24.2
|
|
Amortisation of intangible assets
|
1.7
|
1.9
|
|
Share of joint venture
|
(0.7)
|
(0.6)
|
|
Share-based payment charges
|
2.6
|
1.4
|
|
Profit on sale of fixed assets
|
-
|
(0.1)
|
|
Pension contributions
|
(0.3)
|
(0.3)
|
|
Pension service and running costs
|
1.0
|
0.7
|
|
Increase in inventories
|
(15.0)
|
(14.1)
|
|
Increase in receivables
|
(4.0)
|
(25.6)
|
|
(Decrease)/increase in payables and provisions
|
(1.1)
|
1.5
|
|
Site relocation costs
|
1.9
|
-
|
|
US pension settlement
|
-
|
(0.7)
|
|
US class action lawsuit
|
1.1
|
-
|
|
Corporate undertaking costs
|
(1.3)
|
(0.2)
|
|
Working capital and provisions currency movements
|
(0.5)
|
(0.3)
|
|
Cash generated by operations
|
29.5
|
8.6
|
|
Income taxes paid
|
(5.0)
|
(2.4)
|
|
Interest paid
|
(10.1)
|
(7.9)
|
|
Net cash from operating activities
|
14.4
|
(1.7)
|
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 the items reconciling reported profit
before tax and adjusted profit before tax defined in Note 4,
financing and transactions with shareholders. It is derived
as follows:
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Net cash from operating activities
|
14.4
|
(1.7)
|
|
Net restructuring costs paid
|
0.3
|
0.6
|
|
US pension settlement paid
|
-
|
0.8
|
|
Site relocation costs paid
|
0.7
|
-
|
|
Corporate undertaking costs paid
|
1.3
|
0.2
|
|
Interest received
|
3.2
|
1.9
|
|
Proceeds on disposal of property, plant and
equipment
|
-
|
0.1
|
|
Purchases of property, plant and
equipment
|
(16.3)
|
(12.9)
|
|
Purchase of intangible assets
|
(0.6)
|
(0.8)
|
|
Free cash flow
|
3.0
|
(11.8)
|
c) Analysis of net debt
|
|
At
1 January
2024
|
Net
Cash flow
|
Non
Cash
|
Exchange
movement
|
Other
Lease
Movements
|
At
30 June
2024
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
Cash and bank balances
|
47.6
|
(10.7)
|
-
|
(0.5)
|
-
|
36.4
|
|
|
Overdrafts
|
(1.8)
|
1.8
|
-
|
-
|
-
|
-
|
|
|
Cash and cash equivalents
|
45.8
|
(8.9)
|
-
|
(0.5)
|
-
|
36.4
|
|
|
Debt due within one year
|
-
|
-
|
(27.0)
|
-
|
-
|
(27.0)
|
|
|
Debt due after one year
|
(177.8)
|
(14.5)
|
27.0
|
(0.2)
|
-
|
(165.5)
|
|
|
Lease liabilities (1)
|
(71.8)
|
4.9
|
-
|
0.2
|
(10.3)
|
(77.0)
|
|
|
Liabilities arising from financing
activities
|
(249.6)
|
(9.6)
|
-
|
-
|
(10.3)
|
(269.5)
|
|
|
Total
|
(203.8)
|
(18.5)
|
-
|
(0.5)
|
(10.3)
|
(233.1)
|
|
|
(1)
|
The change in lease liabilities in
the six months ended 30 June 2024 includes lease rental payments of
£6.5m (£1.6m of these payments relates to lease interest), £0.2m
exchange movement and £10.3m other movements related to lease
additions and modifications.
|
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
Cash and Cash equivalents comprise:
|
£m
|
£m
|
|
Cash and bank balances
|
36.4
|
35.7
|
|
Total
|
36.4
|
35.7
|
Cash and cash equivalents (which are presented
as a single class of assets on the face of the Condensed
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:
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Inventories
|
221.9
|
199.4
|
|
Trade and other receivables
|
144.3
|
147.1
|
|
Trade and other payables
|
(188.1)
|
(183.2)
|
|
Working capital, including
derivatives
|
178.1
|
163.3
|
|
Items excluded:
|
|
|
|
Foreign exchange contracts
|
2.5
|
0.5
|
|
Total
|
180.6
|
163.8
|
Working capital and provisions movement, net
of restructuring items, a non-statutory cash flow item, is derived
as follows:
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Increase in inventories
|
(15.0)
|
(14.1)
|
|
Increase in receivables
|
(4.0)
|
(25.6)
|
|
(Decrease)/increase in payables and
provisions
|
(1.1)
|
1.5
|
|
Working capital and provisions movement,
excluding currency effects
|
(20.1)
|
(38.2)
|
|
Items excluded:
|
|
|
|
Increase in restructuring related inventory
impairment
|
-
|
(0.4)
|
|
Decrease in net restructuring
provision
|
0.3
|
0.1
|
|
Total
|
(19.8)
|
(38.5)
|
13.
Provisions
Current and non-current provisions include
warranty costs of £17.7m (30 June 2023: £16.8m; 31 December 2023:
£17.9m), restructuring of £0.2m (30 June 2023: £0.1m; 31 December
2023: £0.5m) and other provisions including contractual matters,
claims and legal costs that arise in the ordinary course of
business of £7.6m (30 June 2023: £4.9m; 31 December 2023:
£7.1m). Warranty costs include a provision of £10.9m related
to one specific disputed commercial matter (30 June 2023: £9.9m; 31
December 2023: £11.0m). The range of reasonably possible
outcomes considered by the Board is £5.4m, which reflects a
reasonably possible increase or decrease of £2.7m. No further
details on the matter are disclosed to avoid prejudicing the
contractual position.
14. Share
capital
Share capital as at 30 June 2024 amounted to
£41.9m (30 June 2023 and 31 December 2023: £41.9m). No shares
were issued during the period.
15.
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, a
provision has been made for the best estimate as at 30 June 2024
(see Note 13). 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.
16. 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 the first six
month of 2024, £0.04m car park rental was received (H1 2023 -
£0.04m). There are no outstanding amounts at 30 June 2024 (30
June 2023: £nil).
The Group has also related party relationships
with a number of pension schemes (see Note 11) and with Directors
and Senior Managers of the Group.
17. Financial
Instruments
Categories of
financial instruments
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Carrying value of financial assets:
|
|
|
|
Cash and bank balances
|
36.4
|
35.7
|
|
Trade receivables
|
129.9
|
129.5
|
|
Other receivables
|
0.3
|
0.2
|
|
Financial assets at amortised cost
|
166.6
|
165.4
|
|
Foreign exchange contracts- cash flow
hedges
|
1.0
|
3.2
|
|
Foreign exchange contracts- held for
trading
|
0.3
|
-
|
|
Total financial assets
|
167.9
|
168.8
|
|
|
|
|
|
Carrying value of financial
liabilities:
|
|
|
|
Bank overdrafts and loans
|
192.5
|
155.1
|
|
Lease liabilities
|
77.0
|
71.1
|
|
Trade payables
|
105.6
|
98.4
|
|
Deferred consideration
|
-
|
23.0
|
|
Other payables
|
61.8
|
56.0
|
|
Financial liabilities at amortised
cost
|
436.9
|
403.6
|
|
Contingent Consideration - fair value through
profit or loss
|
19.3
|
28.2
|
|
Foreign exchange contracts- cash flow
hedges
|
5.4
|
6.8
|
|
Foreign exchange contracts- held for
trading
|
0.2
|
0.1
|
|
Total financial liabilities
|
461.8
|
438.7
|
|
|
Half-year
ended
30 June
2024
|
Half-year
ended
30 June
2023
|
|
|
£m
|
£m
|
|
Undiscounted contractual maturity of financial
liabilities at amortised cost:
|
|
|
|
Amounts payable:
|
|
|
|
On demand or within one year
|
215.5
|
196.3
|
|
In the second to fifth years
inclusive
|
187.4
|
178.7
|
|
After five years
|
91.4
|
72.7
|
|
|
494.3
|
447.7
|
|
Less: future finance charges
|
(57.4)
|
(44.1)
|
|
Financial liabilities at amortised
cost
|
436.9
|
403.6
|
The carrying amount is a reasonable
approximation of fair value for the financial assets and
liabilities noted above except for bank overdrafts and loans, where
the Directors estimate the fair value to be £187.5m (30 June 2023:
£145.8m). The fair value has been determined by applying a
make-whole calculation using prevailing treasury bill yields plus
the applicable credit spread for the Group.
Fair
values
The following table presents an analysis of
financial instruments that are measured subsequent to initial
recognition at fair value. All financial instruments are
measured at either level 2 or level 3. Level 2 are those fair
values which are derived from inputs other than quoted prices that
are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices). Level 3 are
those fair values which are derived from valuation techniques that
include inputs for the asset or liability that are not based on
observable market data (unobservable inputs). There has not
been any transfer of assets or liabilities between levels.
There are no non-recurring fair value measurements.
|
Half-year ended
30 June 2024
|
|
Level 1
£m
|
Level 2
£m
|
Level 3
£m
|
Total
£m
|
|
Assets:
|
|
|
|
|
|
|
Foreign exchange contracts - cash flow
hedges
|
|
-
|
1.0
|
-
|
1.0
|
|
Foreign exchange contracts - held for
trading
|
|
-
|
0.3
|
-
|
0.3
|
|
Total assets
|
|
-
|
1.3
|
-
|
1.3
|
|
Liabilities:
|
|
|
|
|
|
|
Contingent consideration - fair value through
profit or loss
|
|
-
|
-
|
19.3
|
19.3
|
|
Foreign exchange contracts - cash flow
hedges
|
|
-
|
5.4
|
-
|
5.4
|
|
Foreign exchange contracts - held for
trading
|
|
-
|
0.2
|
-
|
0.2
|
|
Total liabilities
|
|
-
|
5.6
|
19.3
|
24.9
|
|
Half-year ended
30 June 2023
|
|
Level 1
£m
|
Level 2
£m
|
Level 3
£m
|
Total
£m
|
|
Assets:
|
|
|
|
|
|
|
Foreign exchange contracts - cash flow
hedges
|
|
-
|
3.2
|
-
|
3.2
|
|
Total assets
|
|
-
|
3.2
|
-
|
3.2
|
|
Liabilities:
|
|
|
|
|
|
|
Contingent consideration - fair value through
profit or loss
|
|
-
|
-
|
28.2
|
28.2
|
|
Foreign exchange contracts - cash flow
hedges
|
|
-
|
6.8
|
-
|
6.8
|
|
Foreign exchange contracts - held for
trading
|
|
-
|
0.1
|
-
|
0.1
|
|
Total liabilities
|
|
-
|
6.9
|
28.2
|
35.1
|