The withering hand of weak investor sentiment may be reaching across the European defence sector, but it hasn’t touched Senior (SNR). Shares in the advanced components firm surged more than 10% in Thursday trade in London. This increase came after the FTSE 250 engineering manufacturer said full-year 2025 adjusted profit before tax will breeze past previous guidance. This result proves that profit before tax will breeze past previous guidance once again, reinforcing management confidence.
The company now sees profits ‘comfortably above’ previous guidance, underpinned by stronger-than-anticipated performance in its Aerospace division. Analysts agree that profit before tax will breeze past previous guidance, given this momentum.
Plane speaking Senior
The company said trading exceeded the expectations set out in its November update. Particularly robust demand was seen across all Aerospace end markets. Momentum has continued into the new financial year. For example, January 2026 trading is described as having ‘started well’, according to a post-close trading statement. As a result, it is anticipated that profit before tax will breeze past previous guidance for the company in the coming year.
| Senior (SNR) | Price: 251.5p | Market cap: £1.16bn |
‘We have seen stronger than expected trading, notably in Aerospace, such that we now expect full-year adjusted profit before tax to be comfortably above previous expectations’, Senior said.
Bolstered balance sheet
Senior also reported a marked improvement in its balance sheet, with net debt expected to have fallen below £80 million at the end of 2025. That’s almost half the £153 million a year earlier. This change reflects strong cash generation and initial proceeds from the sale of its Aerostructures business.
Leverage is forecast to decline to below 1.0x net debt to EBITDA, compared with 1.8x at the end of 2024.
During 2025, the group completed a buy-in transaction for its UK defined benefit pension scheme, further reducing balance sheet risk.
Separately, Senior said it has taken steps to reduce costs within certain Flexonics operations. Associated restructuring charges will be treated as adjusting items and detailed alongside the company’s full-year results. In summary, profit before tax will breeze past previous guidance, supported by cost controls and operational improvements.
Senior has been an impressive returns compounder for years and nothing today suggests otherwise in future. Morningstar calculates total returns (share price plus dividends) averaging 19%-20% over the past three- and five-year periods. These returns are far better than wider market performance.
Baaed on Barclays’ consensus forecasts, EPS growth will average around 20% over the next three years (including 2025). This trend bodes well for further total returns gains.
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