Senior Stock

Welcome to Senior plc's 2025 Full Year Results Presentation. And thank you for making the effort to get here. And thanks also go to Deutsche Numis for hosting us here at their facility. And a warm welcome to you for those of you joining remotely.

Before we present our results, can I just address the elephant in the room. I'm sure that everyone saw our announcement last Friday regarding discussions with potential offerors. As you will appreciate, it is not appropriate to comment further here other than to remind everyone that there can be no certainty that any offer will be made nor as to the terms on which any firm offer might be made.

Please refer to the full statement issued on Friday and restrain yourselves when we get to the Q&A from asking questions that you know we will not be able to answer. In terms of our agenda this morning, I will briefly cover the highlights. Alpna will run through and comment on the results, and then I will give an update on markets, investment proposition and outlook.

2025 was a pivotal year for Senior. We successfully completed the sale of our Aerostructures business to Sullivan Street Partners on the 31st of December 2025, a crucial element in delivering on our strategy to be a market-leading fluid conveyance and thermal management company supplying highly engineered products and systems.

As Alpna will show in a few minutes, we had a strong financial performance with both divisions contributing well and our balance sheet is in great shape. That has allowed us to increase our total dividend to 3p per share, an increase of 25% compared to 2024. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. And looking ahead, we are on track to achieve the medium-term targets we set out last year, which again, Alpna will demonstrate.

So before I talk about markets and outlook, I'll hand over to Alpna to take us through the financial results.

Thank you, David, and good morning, everyone. I'm pleased to take you through Senior's financial results for the 2025 financial year. It has been a year of strong financial performance across the group with continued momentum in both divisions and meaningful progress towards our medium-term financial targets.

With that, turning to some of the key financial highlights. Revenue increased to GBP 738 million, up 6% at constant currency. Adjusted operating profit rose 22% at constant FX to GBP 63.6 million and adjusted operating profit margin expanded by 110 basis points to 8.6% reflecting pricing, volume, increased commercial activity and operational improvements. Adjusted profit before tax was GBP 51.2 million, up 24% at constant currency, and adjusted EPS grew 9% to 9.65p, demonstrating strong underlying earnings momentum.

I'm pleased to say return on capital employed increased 140 basis points to 13.1%, reflecting higher earnings. We also achieved cash conversion of 90%, up 400 basis points on the prior year. We have proposed a total dividend of 3p per share for 2025, an increase of 25% year-on-year.

So this slide covers the revenue bridge. On a reported basis, revenue grew 4% to GBP 738 million with currency headwinds of roughly GBP 10 million. On a constant currency basis, revenue was up 6%. Looking at divisional performance at constant FX. Aerospace revenue increased 10% to GBP 426 million. Civil aerospace revenue increased 9% year-over-year, largely driven by positive pricing and volume. Defense also had strong growth, up 12% as we continue to see increased volumes for the F-35, the C-130 and other military programs and higher pricing.

Revenue from adjusted markets increased 14%, largely driven by demand from the semiconductor equipment market. And in Flexonics, revenue was broadly flat at constant FX. 2025 saw a softening in the North American and European heavy-duty truck market. But despite this, our land vehicle revenue increased 1.6% with the ramp-up of new programs. David will expand on this later. Revenue from power and energy markets decreased by 2%. Higher demand in our downstream oil and gas and nuclear business was offset by lower revenue in upstream oil and gas and other industrial sectors.

Moving to the adjusted operating profit bridge. Adjusted operating profit increased 20% despite a modest GBP 1 million FX headwind. Starting with 2024 on the left-hand side of GBP 53 million, Aerospace delivered the largest uplift of GBP 12 million, benefiting from increased pricing, volume drop-through, mix and commercial settlements as well as strong operational execution.

Flexonics also contributed positively, supported by strong aftermarket sales in our downstream oil and gas and nuclear business as well as restructuring initiatives. In addition, the contribution from our China joint venture was significantly higher year-over-year. Lastly, performance-related incentives associated with the group's improved results were charged through central costs, largely driving the increase there. We ended 2025 with adjusted operating profit of GBP 63.6 million, an increase of 22% on a constant FX basis.

So turning to divisional performance. Aerospace had an excellent year. Book-to-bill increased from 1.17 to 1.21, driven by increasing demand and build rates. At constant FX, revenue was up 10.4%, adjusted operating profit increased 32.5%, resulting in margin expansion of 190 basis points, reaching 11.4%.

The Aerospace division delivered on a number of fronts, including positive price increases, closing out a number of commercial settlements as well as achieving operational efficiencies. Demand was strong across civil defense and adjacent markets with Spencer, our U.S. hydraulic fluid fittings business, delivering outstanding growth of 32% year-over-year, further demonstrating our ability to integrate value-enhancing bolt-on acquisitions. During the year, the Aerospace division was awarded new contracts as well as extensions of existing contracts.

For example, we secured a multiyear contract for highly engineered aerospace standard parts from Airbus to be manufactured in Europe, and we were also awarded a 3-year contract from an industry-leading distributor for high-pressure hydraulic fittings.

Now on to Flexonics, where we delivered a resilient result in softer end market conditions. Book-to-bill went from 1.01 to 0.93, given softer conditions in the heavy-duty truck market, but also due to higher prior year comparative where we had a large project for expansion joints related to a new CATOFIN plant in India. In addition, our aftermarket business in downstream oil and gas tends to have relatively short lead times, and therefore, order flow can be lumpy.

At constant FX, revenue increased marginally and adjusted operating margins rose to 11.2% and to 12.1% when including the contribution from our China JV. We benefited from favorable aftermarket mix, particularly in our Pathway business as well as successful execution of restructuring in selected operations across North America and Europe.

The China JV performed especially well with our share of profit rising to GBP 3 million from GBP 1.2 million last year. The Flexonics division was awarded a number of important contracts this year. We were awarded the supply of fluid conveyance assemblies for multiple light vehicles across diesel, gasoline and hybrid platforms by a global supplier. In addition, Flexonics was awarded exhaust gas recirculation, coolers on a new engine type to be used on multiple platforms by a leading global manufacturer of heavy-duty trucks.

Slide 10 shows the reconciliation of adjusted operating profit to the statutory reported profit for the period for the continuing business. It also highlights our interest and tax charges. Net finance costs increased by GBP 1.3 million due to high interest rates on variable rate debt and higher average net debt in comparison to the prior year. IFRS 16 interest charge on lease liabilities increased by GBP 0.4 million, and we had net finance income from our pension plans of GBP 2.1 million.

A tax charge of GBP 11.3 million was recognized on our adjusted profit before tax. We expect the effective tax rate of 20%, 22% for the full year 2025. In terms of reconciling adjusted profit to statutory profit, we had just under GBP 1.6 million of amortization, which was noncash related to acquisitions, site relocation costs of GBP 2.4 million for the transfer of manufacturing from the -- from our U.S. to our cost-competitive facility in Mexico as well as costs related to the relocation of our U.K. innovation center in Wales.

We had GBP 7.3 million of pension benefit clarifications. These relate to the U.K. defined benefit pension scheme buy-in which took place in September 2025. As part of the due diligence work undertaken for the buy-in, some historical benefit clarifications were identified. Most of these have already been funded through the pension buy-in process. The remainder will be funded from the GBP 23 million actuarial surplus. We had GBP 5 million of restructuring initiatives, largely related to head count reductions in Flexonics across North America and Europe as well as a result of softer end market conditions in the heavy-duty truck market.

We had GBP 0.8 million related to the fair value change on contingent consideration and other related costs for the Spencer acquisition and a GBP 4.5 million tax benefit on adjusting items. After these adjustments, reported profit for the year was GBP 27.3 million.

Moving to cash flow generation. Free cash flow increased 37% year-over-year to GBP 36 million. We can see the key drivers here of adjusted operating profit to free cash flow. Starting from the left, we have our adjusted operating profit of GBP 64 million. Add back of depreciation and amortization of GBP 29 million and just over GBP 6 million of other items.

Working capital outflow was GBP 8 million, of which GBP 5 million related to inventory build to support customer demand and the balance being a movement in receivables of GBP 14 million and payables of GBP 10 million. Working capital was circa 14% of sales in 2025, partly driven by the timing of customer collections at the year-end. For 2026, we currently expect it to be 18% of sales to support customer demand, predominantly in aerospace.

CapEx of GBP 32 million equates to 1.5x depreciation excluding the impact of IFRS 16 depreciation. For 2026, CapEx is expected to be lower at 1.3x as we continue to support growth in both divisions. Operating cash flow amounted to GBP 57 million. We paid interest of GBP 14 million and tax of GBP 7.5 million, giving us GBP 36 million of free cash flow. Our 2025 performance reflects higher profits, strong working capital discipline and CapEx investment to support growth.

We remain focused on maintaining excellent cash generation as a core enabler of investment, shareholder returns and balance sheet strength. So what does that mean in terms of net debt? While net debt, including IFRS 16 leases, reduced significantly to GBP 117 million at the year-end, a reduction of over GBP 110 million. Strong free cash flow proceeds from the Aerostructures disposal and disciplined capital allocation contributed to this outcome.

You see the opening net debt balance of GBP 230 million on the left-hand side, the free cash flow I talked about of GBP 36 million. We then see GBP 3 million of free cash outflow for discontinued operations, dividends paid of GBP 10 million, share purchases for the employee benefit trust of GBP 7.4 million, joint venture dividends received of GBP 1 million, proceeds from the disposal of Aerostructures and Spencer Aerospace contingent consideration of GBP 108 million as well as other items of GBP 12 million, predominantly leases. And finally, FX giving us our closing position of GBP 117 million. Leverage ended the year at 0.9x, placing us in a strong financial position as we moved into 2026.

Moving on to our financing position, which remains strong. We had GBP 294 million of committed facilities diversified across U.S. private placement notes and bank credit facilities during the year. We issued a new private placement note of USD 40 million. We repaid U.S. private placement maturities totaling USD 60 million and GBP 27 million. And in January 2026, we've repaid the GBP 30 million term loan used as a bridge to the Aerostructures disposal. Our balance sheet is strong, liquid and well structured with ample headroom to support growth and disciplined capital deployment.

So our 2025 performance demonstrates clear progress towards our medium-term financial targets, across margin, cash conversion and return on capital employed. Group operating profit margin of 8.6% continues to trend upwards. Aerospace margin reached 11.4%, progressing towards our mid-teens target. Flexonics margin of 11.2%, excluding the JV, sits well within our expected 10% to 12% range. We said we would achieve at least 10% even in a down year and 2025 was a test for this given the softer conditions in the heavy-duty truck market. If we include the JV, the margin was 12.1%, which exceeds the range.

Return on capital employed of 13.1%, steadily advancing towards a 15% to 20%. Cash conversion exceeded the 85% target, delivering 90% in 2025. As you can see, we remain firmly on track to deliver against these targets. We underpin the targets with a strong balance sheet. We were comfortably within our target leverage of 0.5x to 1.5x. Our leverage was at 0.9x at the year-end of 2025. Revenue growth of 6% at constant FX in 2025 was in line with our expectation of mid-single digit organic revenue growth through the cycle.

Now turning to Slide 15, capital allocation. Our capital allocation framework remains unchanged, disciplined, returns-focused and aligned with shareholder value creation. In 2025, we invested GBP 32.6 million in CapEx to support business growth. This equated to 1.5x. We expect this to trend down to 1.3x in 2026, and our medium-term expectation continues to be 1.1x. We invested 2.1% of revenue in research and development in 2025, consistent with our 2% to 3% of revenue target. Dividends of GBP 12.3 million reflects our progressive dividend policy.

We are proposing a total dividend of 3p per share in 2025, which is a 25% increase on the prior year and equates to an earnings cover of 3.2x. As stated previously, leverage remains comfortably within our target range. We continue to explore value-accretive bolt-on M&A aligned with our core capabilities. Finally, in view of Rule 2.4 announcement last week, we have postponed the staff, the GBP 40 million share buyback program, which had been due to commence following publication of the full year results. This will be kept under review, and we will make a further announcement as necessary.

And with that, I will hand back to David, who will take us through the markets and strategy section.

Thank you, Alpna. So let's turn our attention to markets. So in 2025, Aerospace represented 58% of the group's revenues and Flexonics was 42%. And as Alpna has mentioned, Aerospace division sales grew 10% on a constant currency basis, and Flexonics grew marginally despite softer land vehicle markets. Aerospace and defense is now 48% of the group, with civil aerospace being around 2/3 of that and defense 1/3, which represents a good growth opportunity.

Sales to adjacent markets from our aerospace business was 10% in the full year, with revenues from semiconductor equipment customers increasing. Our business is facing into land vehicle at 25% of group revenues and power and energy 17%, continued to perform well against a mixed market backdrop. Similarly, aerospace was 32% of group's revenue in 2025. This includes both large commercial, regional and business jet sectors.

Growth in the end market measured in revenue passenger kilometers or RPKs was healthy at around 5%. And we expect long-term civil aerospace market growth of 3% to 4%, driven by the growing middle classes in Asia as well as fleet modernization and aircraft replacement. We have very good positions on all single-aisle and wide-body platforms as well as most regional and large business jet programs.

In 2025, our civil aerospace sales grew 10% at constant FX, driven by improved pricing and higher build rates. Both Airbus and Boeing have record order books with single-aisle and wide-body rates set to increase further this year and beyond, which will drive further growth for Senior. You'll be aware that many countries are committing to higher defense spending. Senior has good content on key U.S. and European military aircraft platforms. In 2025, our defense sales grew strongly 12% year-on-year, and that was driven by higher sales to C-130, F-35 and strong military aftermarket demand.

Turning now to Flexonics. We had a strong performance in 2025 relative to end markets. In land vehicles, the new contracts we have won over the last couple of years reached a peak production, which is why our passenger vehicle sales growth is 31% year-over-year compared to market growth of just 1%. And while truck markets were slower in 2025 compared to 2024, particularly in the second half of the year, we did outperform the market in North America, with our sales down 18%, while the market declined 25%.

Our European truck sales reduced by 1%, in line with the market. ACT Research are expecting truck markets to continue to be weak in the first half of '26 before starting to recover in the second half of the year. In power and energy, a really strong performance at our Pathway business in Texas led to strong downstream oil and gas and nuclear sales. While upstream oil and gas sales continued to be subdued as we continue to reduce our exposure to commoditized products.

At last year's Capital Markets event in March and at our half year results presentation in August we went through our fluid conveyance and thermal management strategy in detail. I won't repeat everything we discussed then, but we have included relevant material in the appendices to enable more detailed discussions on a one-to-one basis. We believe we have a compelling investment proposition. With a century of relevant experience, we can genuinely claim to be experts in fluid conveyance and thermal management.

We have truly differentiated products with rich background and foreground intellectual property, coupled with expert design and manufacturing know-how. We operate in attractive and structurally resilient end markets and are well positioned to take advantage of that over the medium term. And we have long-lasting relationships with our customers and are trusted by them to deliver excellent products and to respond with agility when they need our support.

Our senior operating system is driving operational excellence and efficiency across the group. And our global footprint with a strong presence in our home markets and world-class facilities in cost-competitive countries is a real advantage. And finally, as these 2025 results have demonstrated, our financial strength with improved performance, strong cash flow generation and low leverage supports investment and shareholder returns.

So let me finish by talking about the outlook for Senior. Trading in the first 2 months of 2026 has started well, and the Board's expectations are unchanged for 2026. In aerospace, growth in civil aircraft build rates and increased demand across its other markets is expected to drive further good progress in 2026 and beyond. Flexonics expectations for 2026 are unchanged with robust double-digit margins being maintained when including the JV, notwithstanding the softer conditions in certain end markets.

Looking ahead, we are confident of delivering enhanced shareholder value as we execute on our strategy and continue to strengthen our financial performance in line with our medium-term financial targets.

So with that, we'll open the floor for any questions, which Alpna and I will be delighted to answer. Any questions? Yes, Tom?

Thomas Rands from Berenberg. Just 2 questions, if I may. First one, on the Flexonics head count reductions. I think you said that was relating to mainly the Class 8 heavy truck activities. As and when that activity picks up again, how much of that head count do you think will come back in? How much is temporary versus permanent kind of takeout? And then the second one is just on M&A pipeline. How active, what sort of valuations are you seeing? Anything interesting in the...

I'll take the first one. Thanks for that, Tom. In terms of Flexonics headcount, so what we've said is that we took GBP 5 million of cost out in 2025. It predominantly related to Flexonics. In terms of savings, we have about GBP 4 million of savings in 2026. And it really depends on if and when that market comes back as in terms of timing, as to how much of that cost comes back, but some of it was structural costs that was taken out, and some of it was temporary costs that was taken out. So it was a bit of both.

Yes. And I think on the M&A side, look, we've got -- I got Nigel Major, our VP of Strategy, here with us today. So Michael -- sorry, Nigel, not Michael. Nigel maintains a really good and healthy pipeline. We've been quite focused on that for some time. And when you went through our capital allocation policy, which looks at both returning cash to shareholders when it's sensible to do so, but also looking at bolt-on accretive M&A. So I think in the appendix, you'll see our acquisition heat map where we lay out those areas that we're most interested in.

But I think the Spencer acquisition has been a great success. There's a lot of growth yet to come from that acquisition and everything else that sort of encouraged within the business such as working with our colleagues in Ermeto in France to develop their range of products with help from Spencer. So that's kind of a typical type of acquisition we do, really looking at products in aerospace or industrial markets that are bespoke. They have got high design content and have decent margins, good returns on capital and really facing into sort of the attractive markets we're currently facing into. So think of it as bolt-on accretive M&A that we'd be most interested in. Not rushing out to do anything. But certainly, we maintain an active pipeline.

It's Richard Paige from Deutsche Numis. Just 3 from me, please. Just on aerospace. Obviously, really strong margin performance in 2025. I think back to the Capital Markets Day, you spoke about pricing being obviously half of that and 80% covered with long-term agreements at that point. Has that progressed at all on that side?

On the second one, strong performance in the joint venture in China. Is there anything exceptional in that, that we should be aware of? And then just on the third point, semicon, obviously, a very strong outlook and strong performance you've had this year. Could you just remind us of the lead times in that business for you, please?

Yes. So on the pricing side, yes, those -- well, remember, Richard, there's 3 elements to the margin progression up to the mid-teens where roughly half of it come in pricing, a quarter from operational efficiency and a quarter from volume. We made good price -- good progress on pricing last year. Some of the pricing we'd already done cut in last year, some of it cuts in next year as well. So we've got one big negotiation left to do that we're in the midst of, and we would anticipate that concluding this year, and that's the bulk of the long-term agreements.

We've got a lot of purchase order business, spot business. So that gets priced as it goes along. And then on an ongoing basis, we'll have contracts coming up for renewal. So -- but we've got a very good approach to pricing now. Look, it's fair we always look for win-win solutions with our customers, but we're absolutely on track to achieve our objectives from a pricing perspective and that gives us half of that margin improvement. So it's in a good place.

On the JV in China, yes, it's a good fun business. And the -- our joint venture partner, PPM, works very closely with us. They're primarily focused on the land vehicle business, a lot of it is passenger vehicle, but they also do truck business. Cummins were in China almost before any other Western company, and they asked us to set up this facility long before I joined the company. And it's kind of been bubbling under, but it's really now holding its own. So some fantastic products.

One of the products they made last year that helped. I didn't know, but in the steering column, you have a little bellow. So if you hit the steering wheel in the crash, the bellows absorbs the impact and allows it to fold. So we won all of that business because the previous supplier for our customer wasn't performing very well. And our team in China developed prototypes qualified in record time and that led to all of the business being awarded to us. So that was one of the reasons why we did really well last year, and we'll continue to do so. But that's just one example.

And in fact, this particular customer now wants us to build the same product in the joint venture facility in Mexico for all the North American business. So a really good example of how we've been able to progress our business there. So there are good cost competitive location, but really great at engineering as well. I'll keep going. Semiconductor -- yes, semiconductor, strong demand. Our main customer is Lam Research. Out of our Meta Bellows facility, Lam has been doing well. We've been doing well.

The product -- from a standing start, it's probably 4 to 6 months. But because we've got ongoing forecast orders, the actual cycle time through the factory is nearer 6 weeks. So we got pretty good forecasts from Lam. We monitor what's happening in the industry more generally. So we can respond quite quickly if the demand goes up if that was where your question was going. Yes.

It's Andrew Humphrey at Peel Hunt. Just a couple, if I may. One to follow up on Richard's question on the aerospace. You've obviously highlighted pricing, volume, mix, commercial settlements all been pretty strong positive drivers in '25, contributing to that result. Pricing, you've obviously talked about the agreements continuing to come through there this year and next. Volume, it feels like it's in a pretty good place, given the reporting that we're seeing everywhere.

I wanted to ask commercial settlements, I guess, can't model those, but I wanted to ask about mix in the light of your comment on spot business rather than contract business. It does feel like kind of volumes have picked up maybe a little bit ahead of what we were expecting. Does that mean sort of more spot business for you? And does that tend to be positive for margin? And yes, let me pause there. I have a couple of more.

Yes. I think from a volume perspective. So worth reminding what I said in the presentation there. If you look at our aerospace business now that we have sold structures, we're about 1/3 large commercial aircraft, 1/3 regional and biz jet and a 1/3 defense. So slightly different growth characteristics in those 3 sectors, but they were all strong last year. In fact, we did see good military aftermarket business last year, and we see that sort of continuing at the moment. So that's one of the things that helps. Otherwise, I think our growth was where we thought it would be coming through on the civil side with those rate increases, we'd expect that to continue. So far, the demand signals we're seeing from Boeing and Airbus are what we would expect.

Great. Maybe on Flexonics then as well. A couple of things there. Obviously, we had the ACT numbers back around Q3, indicating like challenges ahead for '26. I think you talked a lot about that. I wonder we're now sort of nearly 6 months down the road from there, I wonder how the early signs that you're seeing with customers compare that view from back in October, November time. And then also on Flexonics on the oil and gas side, clearly, it's kind of early days given events over the weekend, but it also feels like a few parts of the market have been positioning for disruption in the Middle East for a few weeks now. I wonder what early indications you're seeing from customers there.

Okay. So on the heavy-duty truck side, first of all. So ACT are currently predicting a 3% growth in 2026, but that's really a game of 2 halves there. If you look at year-on-year, it's significantly down in the first half of the year with the recovery starting in the second half of the year. So we'd like to be a bit further into the year before we call it what we really think is going to happen, that would be great. If we do get that strong recovery come in the second half of the year, but it's off a pretty low comparator remember.

So far, our expectations are unchanged, but we're monitoring that very carefully for anything that might change. So first half down, and we're expecting the second half to be up a bit. Let's hope it improves, it might improve. We'll see. And then oil and gas, gosh, it really is a bit early to be answering that one about the disruption by current events. I think for us, what's important is more downstream oil and gas.

We've really moved away from -- we had one business that supplied parts that used to sit on top of drill bits for downhole drilling, and we've really moved away from that because the product was quite commoditized. A lot of it have been offshored. It's not that important to us now. So what is important is industrial process control, downstream oil and gas, the huge expansion joints that go into refineries and so on. That's predominantly all aftermarket business. So as long as people are running CATOFIN plants, refining, running nuclear plants and in power and energy, then we'll continue to get good aftermarket from that.

What we don't have this year is the big anchor project we had in the '24, start of '25 for the Government Authority of India Limited, which was our new CATOFIN plant. So this year, it's really all that repairs, spares, emergency callouts, et cetera. So it's quite a short cycle business so far, so good.

And maybe finally on FX. I think [ 131 ] to FY '25, clearly kind of more of a headwind this year. Any additional actions that we're taking to accommodate that?

In terms of FX, I mean, if I look at where our earnings are at, I mean, 2/3 our business is in the U.S. And so yes, there would potentially be an FX headwind in 2026. And yes, so I mean we are looking to make sure that's baked into our pricing, that we are taking the right actions locally to do that. I mean -- and it's mainly a translation risk in terms of how we transact with our -- in our businesses. It tends to be local for local.

Any more questions? Alex, no questions today?

Can I ask a couple of?

Yes. I can see them on the top of your tongue.

Good to put me on the spot. Alex O'Hanlon, Panmure Liberum. If I ask a couple of quick questions. Firstly, on the working capital absorption out, you showed that there was good progress there to 13.5% and indicated we should see that going back up to 18% in FY '26. How should we think about the range for the medium term? Where should that sit?

So I mean it will probably be somewhere in between, Alex. So in terms of '25, the working capital was impacted by some -- by collectibles that happened at the year-end in terms of customer receipts. At the moment, we think it will be about 18% for FY '26. We hope we'll come in better than that, but that's where it's standing today. And then in terms of the medium term, we hope to get that down over the 3 years. We're making good progress against that. But at the same time, we are seeing that demand come through in aerospace. So we will need to support to ramp that -- support that ramp up.

Alpna drives the business very hard on their inventory as you can imagine.

No, definitely. And then just one other question. In terms of aerospace, I mean, we've kind of picked apart the margin and the benefits there already in a lot of detail. But is there any further information you can give us on how much the benefit from contract settlements was in FY '25, when we're thinking FY '26, it could be a headwind if there's a non-repeat?

Yes, there was a few million there. I think what we talked about was an insurance settlement in the first half year, that was GBP 3 million. I think we said that. So -- but I will say there's always one-offs.

Yes. I mean we do push the businesses at the year-end in terms of closing out any customer negotiations and getting things settled as does any business. And the team did a great job in 2025 of doing that. And as David said, there's always that you have that every year in any business. So it's -- we don't disclose the exact amount, but it was -- yes, it was a good number.

And that's baked into our guidance as well, aren't those...

Yes, that's baked in.

Okay. Any last questions? Yes, Tom.

Thomas Rands again from Berenberg. Just one follow-up just on your comment around military aftermarket being strong. We always think of Senior as an OE, kind of not an aftermarket kind of play. What was driving that within military? And are there any other opportunities elsewhere? I was always thinking no, but these things [ possibly happening ] now again.

Yes. So as a percentage now it's slightly higher because the aftermarket we do have is within our fluid conveyance businesses. So business like SSP in California, Metal Bellows in Boston have decent military aftermarket, C-130, for example. Think how many C-130s are flying there. And we do get aftermarket associated with that for our international customers as well as our sort of U.S. domestic customers. So that -- there's always an ongoing level. And at the moment, that was increasing last year, and we see that continuing to be strong.

Are there opportunities elsewhere?

Yes. I think we're always pursuing more opportunities to increase that aftermarket as part of our growth strategy for sure.

Okay. Thank you very much, everybody. I really appreciate you taking the time to come this morning. Look forward to following up with you.

Thank you.