Senior Share Discussion Threads

[archy147] 01/11/2021 10:08

Hmm not impressed with this continued drift down of the share price since the £2 offer was rejected. AS monte says, the BOD need to damn well pull their fingers out.

(I never liked the fact they turned the £2 down, it was never in shareholders best interests for them to do this, so can only imagine the BOD were acting solely in their own interests)

Anyway, will look to buy back a 3rd tranche if it falls below 150

[monte1] 15/10/2021 16:19

The BOD better get the finger out and start unlocking all that embedded value that Lone Star’s bid of £2 didn’t account for otherwise it could get a bit sticky shortly when the takeover panel 6 month break clause expires.

[castleford tiger] 13/10/2021 09:56

I took advantage buying another 50k at under 158p

happy to wait for recovery or another bid
tiger

[gargoyle2] 13/10/2021 08:40

Panmure reduce to a 'sell' (target 158). Hardly worth it. Hoping that other brokers at the CMD yesterday wioll have been a little more impressed!

[lindowcross] 08/10/2021 08:18

Absent war, pestilence, and the like I agree Tiger's target of 250 on natural market valuation in, say, 12-18 months. It's a premium international engineering company with hugely valuable intellectual property. It has excellent customers emerging from the slumber of lockdown primed to place orders. Personally now I wouldn't welcome a take over at less than 300

[medieval blacksmith] 30/9/2021 17:00

Come on, put another offer in, you know you want to!

LOL!

[medieval blacksmith] 30/9/2021 16:59

Looks like it.

[carpingtris] 30/9/2021 16:50

summit brewing?

[castleford tiger] 20/9/2021 14:54

Bought again this morning. 155p

[castleford tiger] 09/9/2021 10:23

I have 275,000 shares i expect a solid recovery and serious pressure from key stakeholders if price does not exceed 200p bid that was rejected.

I have a 250 target within 12 months.

tiger

[monte1] 09/9/2021 09:41

#3084

I would be surprised if his position is large enough to mount a takeover bid.

[gargoyle2] 09/9/2021 09:38

CT, are you thinking takeover or just a solid recovery?

[castleford tiger] 09/9/2021 09:26

finished buying this morning at average 162,

I am now fully in with a good size position
tiger

[castleford tiger] 08/9/2021 18:25

added another large chunk late today at 169 average

[lindowcross] 18/8/2021 15:48

Credit: "The Times" today.

Senior: Aerospace sector waiting for take-off
Emma Powell
Wednesday August 18 2021, 12.01am, The Times

Injured prey are easier pickings, but Senior had more bite than its private equity bidder had expected. With the shares retaining much of the gains made since Lone Star’s fifth and final offer in June, investors seem to think that another takeover attempt could be coming.

Who could blame them? British defence and aerospace companies are gathering a scarcity value. Weaker valuations post-Covid have been one lure for bidders. Offers that have materialised in the sector since 2019 have been made at an average discount of 13 per cent against the shares’ all-time high, according to Peel Hunt, the broker.

On that basis, Lone Star’s top 200p-a-share offer for Senior, which specialises in making ducts and valves that help to control fuel consumption, looks the most stingy, at 39 per cent below the shares’ 2015 level. But that was when the engineering group was generating a return on capital employed of more than 15 per cent, exceeding even a 2019 level that was hurt by the grounding of the Boeing 737 Max, to which it was a supplier.


Potential bidders are justified in not being as generous as they were for peers. Senior traditionally has delivered lower operating margins than its competitors, which stems from lower aftermarket sales activity than rivals such as Meggitt, as well as less exposure to the defence industry.

The magnitude of the decline in demand from the aerospace industry means that analysts don’t expect ebitda — adjusted earnings before interest, taxes, depreciation and amortisation — to recover to 2019 levels until 2025. That also means that at an enterprise value of ten times forecast ebitda for 2022, the shares’ valuation is about the highest it’s been since 2013. Management could have a harder job in bartering up any further offers closer into line with its peak value.


That’s not to say that Senior has not made strides in rebuilding itself. It’s on course to cut £50 million from operating costs thanks to a restructuring programme. Debt also looks more manageable. Disposals of non-core businesses, including Senior Aerospace Connecticut during the first half of the year, and better free cash generation than had been expected aided an £84 million reduction in net debt to £71 million — two times ebitda — at the end of June. That’s comfortably below a covenant ceiling multiple of three.

The group is targeting a return on capital employed of 13.5 per cent in the medium term. Taking costs out, reducing the size of the asset base through disposals and slow recovery in demand for its products will help it to move towards this.

However, the pandemic caused airlines to cut capacity, retire older aircraft and look to defer deliveries of new ones. Airbus and Boeing have said that production of single-aisle aircraft will pick up from the end of this year, but a slower recovery in international travel, which typically uses wide-body aircraft, is expected to take longer.

Production volumes for the civil aerospace business, the largest contributor to revenue, are expected to be lower this year than 2020. Demand from power energy markets, where 16 per cent of group revenue was derived in the first half, is not expected to recover until the end of this year at the earliest.

New technologies, where Senior owns the intellectual property, are one avenue that management hopes will increase operating margins.

Lone Star’s bid was a “wake-up call to the market”, Jolyon Wellington, of Peel Hunt, thinks and is one reason that some of the heat remains in the share price. A competitor with the ability to strip out manufacturing costs could achieve £50 million in synergies, he reckons, which could mean that an offer above 300p a share is affordable.

The private equity firm would be allowed to come back for another go in December, but there’s a chance someone could beat it to the punch.
ADVICE Hold
WHY The shares look fully valued against a slow recovery in profits

[castleford tiger] 12/8/2021 09:27

breaking new highs

[archy147] 11/8/2021 10:31

Another tranche bought back at 165p

Also eyeing up marine engineers FSJ who are trading at less than half their pre-pandemic price. Any thoughts on them anybody?

[archy147] 10/8/2021 11:16

Just bought first tranche back at under 167p. Will keep adding on the dips

Love it when a plan comes together

[gargoyle2] 02/8/2021 18:30

In fact, just watching the results webcast where the CEO says that they are looking to fill existing capacity in Structures and add in some other work (esp. in the space sector), so that they then have 'strategic optionality' for the business ..

[gargoyle2] 02/8/2021 18:21

I wonder if 'portfolio optimization' will include dusting off the plans to see the Aerospace Structures business, which was announced in December 2019 and then shelved when covid came along

[archy147] 02/8/2021 15:38

I've sold 40% of my holding into the rise this afternoon.

Relatively confident I'll be able to buy them back at lower than the 177p I sold at

[castleford tiger] 02/8/2021 14:50

Up 14% now fly baby

[ny boy] 02/8/2021 12:58

Nice bear trap this morning, quiet on here, did many sell recently?

Staying in long term

[castleford tiger] 02/8/2021 10:55

If has plenty to go at yet

[ny boy] 02/8/2021 09:16

Stairway to heaven jobbie, hold for higher bidders etc