(Reuters) - Senior Plc (SNR.L), a maker of aircraft parts and auto components, said it expects demand to increase in 2014 as big customers Airbus Group NV (AIR.PA) and Boeing Co (BA.N) ramp up production.
Orderbooks of the world’s two largest aircraft makers have been bulging from increased demand for fuel-efficient planes.
Airbus, earlier known as EADS, said in February it would make more jetliners, a few months after arch-rival Boeing announced plans to increase output.
New narrow-bodied aircrafts built by both manufacturers would have more components from the company, said Senior, which gets more than a third of its revenue from large commercial aircraft makers.
Sales to Bombardier Inc’s (BBDb.TO) C-Series jets would drive growth from 2016, said Senior, which makes hydraulic components, seal assemblies and aircraft wall panels.
The company said it could spend about 150 million pounds to buy other companies. The company was focusing on Asia, particularly India and China, Chief Executive Mark Rollins told Reuters.
“With the world growing faster in that region, it would be good to have a bigger footprint.”
Component suppliers are set to make a killing as airlines get ready to replace obsolete aircraft models with next-generation jets fitted with fuel-efficient engines, according to a report by auditing firm Deloitte. (link.reuters.com/heq37v)
Senior, however, warned that a strengthening sterling would continue to hurt profit in 2014 — the latest among several British companies to do so.
The sterling has gained 1.5 percent against the dollar this year and is expected to rise further.
Senior’s adjusted pretax profit rose to 98.1 million pounds ($164.4 million) in the year ended December 31 from 91.1 million pounds a year earlier.
Revenue increased 6 percent to 775.1 million pounds. The company said .
Shares in Senior, which gets more than half its revenue from the United States, fell nearly 4 percent on Monday on the London Stock Exchange.
“I think once it (the result) is digested the stock will recover,” N+1 Singer Capital Markets analyst Jon Lienard said.
Britain's top share index .FTSE fell to a two-week low on Monday, as investors' appetite for riskier assets fell due to the increasingly tense situation in Ukraine.
The FTSE-250 Midcap Index .FTMC, of which Senior is a component, was down more than 2 percent. Airbus shares were down 3.17 percent on the Paris Stock Exchange.
($1 = 0.60 British pounds)
Reporting by Aashika Jain and Esha Vaish in Bangalore; Editing by Gopakumar Warrier and Joyjeet Das