Reuters: Hot Stocks: UPDATE 1-Aero parts maker Senior sees pricing pressure, shares dip

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UPDATE 1-Aero parts maker Senior sees pricing pressure, shares dip Jul 29th 2013, 11:46 Mon Jul 29, 2013 7:46am EDT (Adds CEO and analyst comments, updates share movement) By Richa Naidu July 29 (Reuters) - British aeroplane parts maker Senior Plc said its margins would come under pressure as planemakers and governments seek to pay less for its components, sending its shares down almost 4 percent. Senior, a supplier to commercial jet makers such as Airbus and Boeing Co, said on Monday that customer pricing pressure was expected to increase. "People are concerned about pricing," said Investec analyst Thomas Rands. "It is a concern that margins are going to go sideways." The forecast dampened investor sentiment after Senior reported a 6 percent jump in first-half profit, driven by demand for commercial aircraft parts such as wall panels and turbine engine components. Chief Executive Mark Rollins told Reuters that component suppliers further up the supply chain were coming under pricing pressure as governments and planemakers aim to reduce costs. The company said in a statement that it aimed to protect its margins by increasing volumes and cutting costs. Senior said the suspension of deliveries of Boeing's 787 had not affected the financial performance of its aerospace division because Boeing had continued to manufacture the Dreamliner at planned rates. Boeing's Dreamliner jets were grounded by regulators in mid-January after batteries on two aircraft overheated. Regulators lifted the grounding in April after Boeing redesigned the battery system, but another aircraft, operated by Ethiopian Airlines, caught fire at Britain's Heathrow airport this month. Adjusted pretax profit rose to 48.3 million pounds ($74.24 million) in the six months ended June 30 from 45.5 million pounds a year earlier. Revenue increased 6 percent to 399.3 million pounds. Shares in Senior were down more than 3 percent at 263.90 pence at 1144 GMT on Monday on the London Stock Exchange. ($1 = 0.65 British pounds) (Additional reporting by Roshni Menon in Bangalore; Editing by Supriya Kurane and Robin Paxton) Link this Share this Digg this Email Reprints

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