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Senior raises profits guidance after strong performance in November and December

The outperformance was driven by a good performance in November and December
Tax cuts
Tax windfalls have given the engineer a boost

Engineering group Senior PLC (LON:SNR) had two bits of good news on Wednesday morning: raised profits guidance and some tax windfalls.

The shares were up 4.9% at 281.2p in mid-morning trading after the company said trading in 2017 had been slightly ahead of previous expectations, thanks to a strong finish to the year.

Tax reform broadly neutral in medium term

The group said it expects to benefit from a one-off reduction in the effective tax rate for 2017 to 17.5%, versus previous expectations of 20%. The lower tax rate should result in a concomitant boost to earnings per share.

The effective tax rate for this year is expected to revert to previous levels.

Across the pond, the much-ballyhooed Tax Cuts and Jobs Act, which will reduce US Federal corporate tax to 21%, should result in a one-off non-cash tax credit for 2017, though over the medium term, the effect of the US tax reform should be broadly neutral for the group.

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