Bottom Line: Senior success
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.IN THE midst of a market swamped with rights issues, Senior Engineer's call for pounds 67m yesterday struck a welcome note. In stark contrast with Simon Engineering - asking for pounds 52m - Senior shareholders can only be encouraged by the move.
Senior wants the cash for two very good reasons: it is making acquisitions and it needs additional funds for working capital.
Senior bought Berghofer of Germany for pounds 8.4m and Metal Bellows of the US for pounds 10.2m yesterday. Both will enhance profits at the already successful Flexonics, Senior's flexible tubing manufacturer. Flexible tubing is attractive as many products are specifically designed for end-users, giving Senior wide profit margins.
In addition, the components made are finding expanding demand. Senior is particularly encouraged by possiblilities in the automotive industry.
Indeed Senior is being so successful it needs more money to fund operations - the second justification for the rights issue.
Profits from Senior's engineered products division, which includes Flexonics, rose by 53 per cent in 1993. Operating profit margins from this division also improved from 5.3 to 6.3 per cent.
It paid dollars 40m for Flexonics in 1992 and since then operating profit has grown from dollars 5.5m to dollars 7.5m. The prices paid for Berghofer and Metal Bellows look similarly attractive. The cash call will also strengthen the balance sheet. At 45 per cent Senior is not over-indebted but bringing that figure down to 30 per cent will allow room for further expansion.
Senior shares fell 8p yesterday to 133p - 3p beneath the ex-rights price as the market slid. Shares, trading at a discount to the sector and yielding a not unreasonale 3.4 per cent, are good value. Subscribe.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments