Senior PLC (LON:SNR) shares rose on Monday as the hard-pressed aerospace engineer repeated its confidence in a return to growth in 2021, although it reported a big drop in full-year 2019 profit, prompting a number of brokers to raise target prices for the FTSE 250-listed stock.
In its 2019 results statement, Senior said it entered 2020 with a "robust balance sheet", but added that it continues to monitor the impact of the coronavirus outbreak, which is not quantified as of yet.
The group has a 49% interest in a joint venture located in the Chinese city of Wuhan, where the outbreak started, although its 32 businesses are located outside of China.
In the year to 31 December 2019, Senior's revenue rose by 3% to £1.1bn, but profit before tax crashed 53% to £28mln. That figure included a £22mln loss after offloading three non-core businesses and a lower operating margin due to the impact of the grounding of Boeing's 737 Max jetliners, to which it supplies parts.
In spite of the increased loss, the company raised its dividend by 1% to 7.51p per share.
Analysts at both Credit Suisse and Jefferies International raised their share price targets for Senior to 198p from 195p, and to 190p from 185p, respectively.
"Senior faces a challenging 2020, but this has long been recognised, and although there are still risks attached to the current year, we believe many of the issues are cyclical and transitory, and the group's recovery potential is significant," Jefferies' analysts said in a note to clients.
In afternoon trading, Senior shares were 2.8% higher at 145.10p, drifting back from a peak of 160.90p hit on Monday morning.
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