The investment column: Senior makes quick recovery

MAKING flexible metallic tubing for car engines, jets and other industrial markets may not be glamorous but Senior Engineering has made it a highly profitable activity. The company hit problems a few years ago with its thermal engineering business, but that was sold last year and Andrew Parrish, who joined as chief executive from Williams Holdings towards the end of 1996, has impressed the City with the speed of the company's recovery.

Yesterday's announcement of operating profits up 17 per cent to pounds 42m were slightly ahead of exceptions and again it was the Flexonics tubing business that was the star performer. Profits there rose by 40 per cent with return on sales up to 11.8 per cent from 9.4 per cent the previous year.

The strategy to develop Flexonics geographically and acquisitions in the last year have included deals in California and India as well as in the UK. Since the year-end other deals have been signed in Holland, Denmark and Spain in areas such as aerospace, industrials and precision tubing.

Mr Parrish wants to build Senior into a pounds 1bn sales business by the end of the decade. While Flexonics will remain the core, it seems other under- performing businesses in the engineered products and services division may be sold if returns do not improve. Profits there fell from pounds 8.4m to pounds 3.1m due to difficult markets.

Asia may prove a happy hunting ground for acquisitions and Mr Parrish wants to the region to account for 10 per cent of group sales by the end of next year from its current 2 per cent. Mr Parrish has already made three visits to the Far East this year and has identified three or four markets for expansion. Top priorities are Japan and South Korea. With net debt of pounds 19m, representing gearing of 15 per cent, the group certainly has the fire-power for more deals of up to pounds 60m. But Mr Parrish is not worried by larger deals and may tap the market for more cash to fund them

There may be more scope to improve margins in Flexonics, though it is the other businesses, where margins are only 2 per cent, that offer the biggest opportunity.

The strong pound is a problem but Senior is not one of manufacturing's whingers, preferring to compete on the grounds of quality and service.

After their slump in 1994 Senior shares have been rising strongly from their low of 68p and reached a new high of 202p yesterday, up another 18p.

With analysts forecasting profits of pounds 50m this year, the shares trade on a forward rating of 17. That seems about right. Hold.

Start your day with The Independent, sign up for daily news emails
Life and Style
Living for the moment: Julianne Moore playing Alzheimer’s sufferer Alice
A propaganda video shows Isis forces near Tikrit
voicesAdam Walker: The Koran has violent passages, but it also has others that explicitly tells us how to interpret them
Life and Style
love + sex
Arts and Entertainment
Victoria Wood, Kayvan Novak, Alexa Chung, Chris Moyles
tvReview: No soggy bottoms, but plenty of other baking disasters on The Great Comic Relief Bake Off
Ashley Young celebrates the winner for Manchester United against Newcastle
footballNewcastle 0 Man United 1: Last minute strike seals precious victory
Life and Style
Tikka Masala has been overtaken by Jalfrezi as the nation's most popular curry
food + drink
Benjamin Netanyahu and his cartoon bomb – the Israeli PM shows his ‘evidence’
ebooksA special investigation by Andy McSmith
Arts and Entertainment
80s trailblazer: comedian Tracey Ullman
Arts and Entertainment
Stephen Tompkinson is back as DCI Banks
tvReview: Episode one of the new series played it safe, but at least this drama has a winning formula
Arts and Entertainment
Jeffrey Archer holds up a copy of 'Kane and Abel', a book he says was ripped-off by Bollywood
Life and Style
food + drink
Arts and Entertainment
Fay Weldon suggested authors should tailor their work for Kindle readers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Christine McCleave: FP&A Analyst

£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers