Senior PLC H1 profit rises 38% as takeover approvals advance

Senior PLC has delivered a strong first half of 2026, with revenue, adjusted profit and operating margins all moving higher.

The engineering group also confirmed that its recommended cash acquisition is progressing, with 10 of the 12 required regulatory and antitrust approvals now secured. Completion is expected by the end of 2026.

The headline reported loss may initially look concerning, but it mainly reflects substantial one-off costs connected with the proposed transaction. Underlying trading tells a much healthier story.

Investors can read the original company announcement for the complete half-year accounts.

Senior PLC's key H1 2026 figures

Metric	H1 2026	H1 2025	Change
Revenue	£390.8 million	£371.2 million	5%
Adjusted operating profit	£39.1 million	£31.2 million	25%
Adjusted operating margin	10.0%	8.4%	160 basis points
Adjusted profit before tax	£34.8 million	£25.3 million	38%
Adjusted earnings per share	6.46p	5.07p	27%
Free cash flow	£16.3 million	£10.6 million	54%
Return on capital employed	14.5%	11.9%	260 basis points
Net debt excluding leases	£89.4 million	£73.3 million at December 2025	£16.1 million increase

At constant currency, which removes the effect of exchange-rate movements, revenue increased by 7% and adjusted profit before tax rose by 40%.

That is a solid combination. Senior is not simply growing sales - it is converting that growth into stronger margins and higher returns on the capital invested in the business.

Why Senior reported a loss despite stronger trading

Senior reported a £5.6 million loss before tax, compared with a £22.8 million profit in H1 2025. However, adjusted profit before tax increased by 38% to £34.8 million.

The gap primarily reflects £38.9 million of costs associated with the proposed acquisition by Zeus UK Bidco Limited. Of that amount, £34.7 million relates to contingent adviser and employee remuneration costs that depend on the transaction completing.

These charges are substantial, but they do not represent the day-to-day trading performance of Senior's manufacturing operations. This makes the adjusted figures particularly useful for understanding how the underlying business performed during the period.

Adjusted earnings per share increased by 27% to 6.46p, while reported basic earnings swung to a loss of 3.19p per share.

Aerospace provides the growth engine

The Aerospace division, which represented 59% of group revenue, was the standout performer.

Revenue increased by 12.8% at constant currency to £231.4 million. Adjusted operating profit climbed by 42.3% to £30.3 million, while the division's adjusted operating margin improved from 10.4% to 13.1%.

Senior attributed this performance to improved pricing, growth in large commercial and business jets, higher defence volumes and increased demand from adjacent markets such as semiconductor equipment.

Civil aerospace sales rose by 16.4%, defence revenue increased by 10.4%, and revenue from adjacent markets grew by 5.4% to £37.1 million.

The 270-basis-point margin improvement is especially encouraging. It suggests that higher volumes, pricing and operational efficiencies are feeding through to profitability rather than growth being absorbed by additional costs.

Flexonics holds its ground

Flexonics delivered a more measured performance, but results were better than management had initially expected.

Revenue slipped by 0.5% at constant currency to £160.2 million. Adjusted operating profit excluding the joint venture increased by 1.1% to £18.2 million, while the adjusted operating margin edged up from 11.2% to 11.4%.

Land vehicle revenue increased by 2.8% to £102.5 million, helped by stronger-than-expected demand. This offset some of the pressure in power and energy, where revenue declined by 5.9% to £57.7 million.

Oil and gas sales fell by £10.4 million because the prior period included a large CATOFIN contract that did not repeat. However, nuclear sales increased by 65% and boiler and power revenue grew by 12%.

The result is that Flexonics maintained a double-digit margin despite mixed end markets. Including the Chinese joint venture, the divisional adjusted operating margin was unchanged at 12.3%.

Cash flow improves, although working capital rises

Free cash flow increased by 54% to £16.3 million, supported by stronger underlying profitability.

Cash conversion was 63%, down from 66% and below Senior's medium-term target of more than 85% through the cycle. Management said first-half cash conversion is typically lower because of normal seasonality.

Working capital produced a £21.0 million cash outflow, compared with £13.3 million a year earlier. This reflected the timing of customer payments and higher inventories held to support increased demand.

Net debt excluding lease liabilities rose by £16.1 million from the end of 2025 to £89.4 million. Even so, leverage remained unchanged at 0.9 times net debt to EBITDA, comfortably within the group's target range of 0.5 to 1.5 times.

Senior also reported £175.3 million of headroom under committed borrowing facilities. That supports the description of the balance sheet as robust, despite the increase in absolute debt.

Medium-term targets are moving closer

Senior has already reached its target of at least a double-digit group operating margin, with H1's adjusted margin standing at 10.0%.

Flexonics is also within its target margin range of 10% to 12%, while Aerospace's 13.1% margin is progressing towards a target of at least the mid-teens.

Return on capital employed, commonly shortened to ROCE, increased to 14.5%. This measures the operating profit generated relative to the capital invested in the business. Senior's medium-term target is between 15% and 20%, placing the group close to the lower end of that range.

The latest figures build on the positive momentum covered in Senior PLC's previous upgrade to full-year expectations.

The takeover now shapes the investment case

Shareholders approved the recommended cash acquisition in May, with 99.7% of votes cast in favour. Senior has now obtained 10 of the 12 required regulatory and antitrust approvals and expects completion by the end of 2026.

No interim dividend has been declared. The transaction's cash consideration assumes shareholders will not receive further dividends or distributions before completion, other than the 2025 final dividend already paid.

There is also a disclosed material uncertainty relating to going concern. If the acquisition completes, decisions over Senior's future financing and existing facilities with change-of-control clauses will sit outside the current directors' control. The directors nevertheless consider the going concern basis appropriate, and the independent review conclusion was not modified on this matter.

This does not suggest weak current trading. It highlights that the proposed change of ownership introduces uncertainty around the group's future financing structure.

What investors should watch next

The operating picture is positive: Aerospace is growing quickly, Flexonics is proving resilient, margins are improving and free cash flow has increased.

The less favourable points are the higher working-capital requirement, increased net debt, the absence of an interim dividend and significant transaction-related costs. The outstanding takeover approvals and associated financing uncertainty also remain important.

Full-year expectations are unchanged from July's upgraded guidance. With both divisions performing strongly, Senior says it remains confident of delivering results in line with those expectations.

For shareholders, the next major development is likely to be progress on the two remaining approvals and confirmation of whether the acquisition can complete by year-end. Further company coverage is available on the Senior PLC share page.