Senior (LON:SNR) reported what management called a “pivotal year” in 2025, highlighted by the completion of its strategic shift toward being a focused fluid conveyance and thermal management supplier and a strong improvement in profitability and cash generation. During its full-year results presentation, the company also reiterated that it is in discussions with potential offerors, but said it could not comment further and cautioned there is no certainty that any offer will be made.
Strategic milestone and early 2026 trading
Chief Executive David Squires said Senior completed the sale of its Aerostructures business to Sullivan Street Partners on December 31, 2025, describing the disposal as “a crucial element” of the group’s strategy. Following the transaction, management emphasized the group’s focus on highly engineered products and systems in fluid conveyance and thermal management.
Full-year financial results: profit, margin and dividends
Finance Director Alpna (as introduced on the call) detailed a year of higher revenue, expanding margins, and improved cash conversion. Revenue rose to GBP 738 million, up 6% at constant currency (and 4% on a reported basis, with roughly GBP 10 million of currency headwinds).
Adjusted operating profit increased to GBP 63.6 million, up 22% at constant currency, while the adjusted operating margin expanded 110 basis points to 8.6%. Adjusted profit before tax was GBP 51.2 million, up 24% at constant currency, and adjusted EPS increased 9% to 9.65 pence.
Senior also reported stronger returns and cash conversion. Return on capital employed rose 140 basis points to 13.1%, and cash conversion improved to 90%, up 400 basis points year over year. The company proposed a total dividend of 3 pence per share for 2025, representing a 25% increase from 2024.
Divisional performance: Aerospace growth offsets softer truck markets
At constant currency, Aerospace revenue increased 10% to GBP 426 million, driven by both civil and defense. Civil aerospace revenue rose 9% year over year, which management attributed largely to pricing and volume, while defense revenue increased 12% on higher volumes in programs such as the F-35 and C-130, as well as pricing. Revenue from adjacent markets rose 14%, led by demand from semiconductor equipment customers.
Aerospace profitability improved sharply. The division’s book-to-bill rose from 1.17 to 1.21, while adjusted operating profit increased 32.5% and margin expanded 190 basis points to 11.4%. Management cited price increases, commercial settlements, mix, and operational efficiencies. The company also highlighted strong growth at Spencer, its U.S. hydraulic fluid fittings business, which delivered 32% revenue growth year over year.
Senior noted new and extended contracts in Aerospace, including a multi-year Airbus contract for aerospace standard parts to be manufactured in Europe and a three-year contract from a distributor for high-pressure hydraulic fittings.
In Flexonics, revenue was described as broadly flat at constant currency amid softer heavy-duty truck markets in North America and Europe. Book-to-bill declined from 1.01 to 0.93, which management said reflected weaker truck conditions, a tougher year-on-year comparison that included a large prior project tied to a new CATOFIN plant in India, and lumpy order flow in short-lead-time downstream aftermarket work.
Despite the market backdrop, Flexonics expanded profitability. Adjusted operating margin rose to 11.2% (and to 12.1% including the China joint venture). Management cited favorable aftermarket mix—particularly in the Pathway business—and restructuring actions across North America and Europe. The group’s share of profit from the China joint venture increased to GBP 3.0 million from GBP 1.2 million a year earlier.
Flexonics also reported several contract awards, including the supply of fluid conveyance assemblies for multiple light-vehicle platforms and exhaust gas recirculation coolers for a new engine type used across several heavy-duty truck platforms.
Cash flow, leverage and capital allocation updates
Free cash flow increased 37% to GBP 36 million. Management described an GBP 8 million working capital outflow, including GBP 5 million of inventory build to support demand and movements in receivables and payables. Working capital was about 14% of sales in 2025, and the company said it expects working capital to rise to 18% of sales in 2026 to support demand, predominantly in aerospace.
Capital expenditure totaled GBP 32 million (about 1.5x depreciation, excluding IFRS 16 depreciation). For 2026, the company expects CapEx to be lower, at around 1.3x depreciation, while still supporting growth.
Net debt (including IFRS 16 leases) fell to GBP 117 million from GBP 230 million, a reduction of more than GBP 110 million. Management attributed the change to free cash flow, Aerostructures disposal proceeds, and disciplined capital allocation. Leverage ended 2025 at 0.9x, which the company said keeps it within its targeted range.
Senior said it has GBP 294 million of committed facilities and issued a new $40 million private placement note during the year, while repaying $60 million and GBP 27 million of private placement maturities. It also repaid a GBP 30 million term loan in January 2026 that had been used as a bridge to the Aerostructures disposal.
In an update to shareholder returns, management said it has postponed the start of a previously announced GBP 40 million share buyback program following last week’s Rule 2.4 announcement regarding potential offer discussions. The company said the buyback will be kept under review and that it will make further announcements as necessary.
Market commentary and Q&A: pricing, semicon lead times and cost actions
On end markets, Squires said civil aerospace demand (measured in RPKs) was “healthy” at around 5% in 2025, and he cited long-term market growth expectations of 3%–4%. He also pointed to record order books at Airbus and Boeing and expected build-rate increases to support further growth for Senior.
Within Flexonics, Squires said passenger vehicle sales growth was 31% year over year, which he attributed to new contracts reaching peak production. In heavy-duty trucks, he said Senior outperformed in North America, with its sales down 18% compared to a 25% market decline, while European truck sales decreased 1% in line with the market. Citing ACT Research, he said markets are expected to remain weak in the first half of 2026 before recovering in the second half, though he added the company wanted to be “a bit further into the year” before drawing firm conclusions.
In the Q&A, management said approximately GBP 5 million of restructuring costs were taken in 2025, predominantly in Flexonics, and it expects about GBP 4 million of cost savings in 2026, with some savings structural and some temporary depending on the pace of a truck market recovery.
On aerospace pricing, Squires reiterated the company’s prior framework for margin progression toward mid-teens, describing roughly half coming from pricing, with the remainder split between operational efficiency and volume. He said the company made good progress on pricing in 2025, with some pricing actions already in place and some expected to take effect in 2026, and noted there is “one big negotiation left” that he anticipated concluding in 2026.
Addressing the China joint venture performance, Squires said the business benefited from winning work after a prior supplier failed to perform and said a customer now wants Senior to build the same product in Mexico for North American business.
On semiconductors, he identified Lam Research as a main customer for the Metal Bellows facility and said lead times from a standing start are “probably four to six months,” while cycle time through the factory is closer to “six weeks” given ongoing forecast orders.
Finally, management noted potential foreign exchange headwinds given that roughly two-thirds of the business is in the U.S., and said it aims to ensure such effects are reflected in pricing where appropriate, describing much of the risk as translation-related given “local for local” operations.
About Senior (LON:SNR)
Senior is an international, market-leading, engineering solutions provider with 30 operating businesses in 13 countries*.
Senior designs, manufactures and markets high-technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land vehicle and power & energy markets.
The Group aims to create long-term sustainable growth in shareholder value through a culture of empowerment of autonomous and collaborative operations working within an effective control framework.
