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UPDATE 2-UK engineer Senior names ex-BAE boss King as chairman
November 13, 2017 / 8:20 AM / 10 days ago

UPDATE 2-UK engineer Senior names ex-BAE boss King as chairman

* Ian King to replace Charles Berry as chairman from April

* Sees adjusted pretax profit slightly ahead of expectations (Adds analysts, details, background, shares)

By Noor Zainab Hussain

Nov 13 (Reuters) - Ian King, the CEO of defence group BAE Systems for almost a decade, will become chairman of Senior Plc next year, as the British engineer prepares for an expected pick up of demand at its main aerospace, trucks and energy businesses.

The announcement on Monday came as Senior, a maker of high-tech components, said it expected adjusted pretax profit this year to be “slightly ahead” of previous expectations.

King, whose career in the defence sector has spanned more than 40 years, will take over as chairman from Charles Berry when he retires in April.

Senior warned on profits last year due to lower demand for parts used in heavy truck production and oil and gas markets, and has flagged subdued markets this year.

But there are signs of improvement heading into 2018.

While Britain faces budgetary pressure in its defence market, U.S. President Donald Trump has pledged an “historic” increase in defence spending.

King has extensive experience of North America, which is BAE’s largest market. The 61-year-old started his career at Marconi in 1976. That company merged with BAE in 1999 and King was strategy director of the combined group.

Most recently, King was appointed a senior adviser to corporate finance advisory firm Gleacher Shacklock to bolster the firm’s contacts with industrial and defence clients.

Senior said it expected the full-year performance at its aerospace business to be slightly ahead of previous expectations and that the end of 2017 would be an “inflexion point” for its trucks and oil and gas businesses.

“After a series of disappointments, it was to be hoped that FY17 would be the bottom for the recent cycle of earnings ... This update suggests that this is proving be the case ... with a generally improving outlook in the previously challenging markets,” said N+1 Singer analyst Jon Lienard, who has a “hold” rating on Senior shares.

At 1400 GMT, the stock was down 0.9 percent at 268.2 pence, broadly in line with weaker UK markets.

Jefferies analysts, who rate the shares a “buy”, said they expected analysts’ 2017 consensus pretax profit forecast of 68.3 million pounds ($89.4 million) to rise about 2 percent.

Senior reported a pretax profit of 55.5 million pounds in 2016, with adjusted pretax profit at 75.3 million.

“We believe Senior is in good shape and has attractive growth/recovery potential looking out over the next 2-3 years (and beyond),” Jefferies analysts said.

$1 = 0.7637 pounds Editing by Sunil Nair and Mark Potter

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