By Prerna Bedi
(Reuters) -British aerospace engineer Senior raised its dividend on Monday after 2023 profits nearly doubled, buoyed by an increase in civil aircraft production rates and robust demand in the land vehicle markets.
"We have achieved a diversified position across key civil and defence aircraft platforms and are benefiting from increasing aircraft build rates which we expect will lead to higher sales in 2024 and beyond," CEO David Squires said in a statement.
It forecast its 2024 performance to be in line with its estimates, as Boeing (NYSE:BA), one of its top customers, had asked suppliers to maintain production of 737 MAX plane parts at previously agreed levels.
The Federal Aviation Administration (FAA) has given Boeing 90 days to develop a comprehensive plan to address "systemic quality-control issues" after restricting it from ramping up the production rate of 737 MAX planes from the current 38 planes a month.
"If you look at last year, for much of last year, the manufacturing rate was 31 per month. So in the worst case scenario, if they didn't go above the rate of 38 this year, there's still growth for the suppliers," Squires told Reuters in an interview.
The company's adjusted pre-tax profit jumped 91% to 38.3 million pounds ($48.5 million) for the year ended Dec. 31.
Senior proposed an annual dividend of 2.3 pence, up 77%.
Demand at its Flexonics division, which makes fluid conveyance and thermal management components for vehicles and power and energy applications, continued to normalise to more typical levels, the company added.
"Much of our product is either coming from North America or Europe, so we don't have to go through the Red Sea... So far, not a big impact for us," Squires said regarding any impact from disruptions to shipping via the Red Sea.
($1 = 0.7897 pounds)