Last checked at 31 Jan 2020 07:00
Senior plc
Market Update - Impact of 737 MAX and 2019 trading
Senior plc ("Senior" or the "Group"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace, defence, land vehicle and power & energy markets, today issues this market and trading update.
On 17 December 2019, the Board noted Boeing's announcement concerning its suspension of the 737 MAX production from January 2020, pending certification and return to service of the airplane. At the time, the Board said it would provide a further update on the potential implications to its 2020 performance once it had clarification from its customers.
While the 737 MAX return to service and Boeing's production restart dates are not yet clear, the Group has been having ongoing dialogue with its customers. It is now evident that the 737 MAX build-rate and pace of production ramp up will be below the Board's assumptions at the time of our Trading Update on 7 November 2019, prior to Boeing's decision to temporarily halt production. Senior has exposure to the 737 MAX programme through several customers, each of whom may have different requirements depending on a number of factors, including their inventory levels.
In our Trading Update on 7 November 2019 the Board noted that revenue in our Aerospace Division will be lower in 2020 than in 2019, before returning to growth in 2021. With Boeing's temporary halt in production, the assumptions around reduced production rates and the slower ramp up, the Board currently expects Aerospace revenue in 2020 to be around 20% below 2019 levels, before returning to growth in 2021. The impact of the anticipated sales reduction will only be partially mitigated by savings from our ongoing restructuring programme and as a consequence, our Aerospace margins in 2020 will be lower than that achieved in 2019.
For the full year 2019, subject to audit, Group revenue is expected to be in line with expectations and adjusted earnings per share(1) are now expected to be ahead of the Board's previous expectations due to one-off benefits from lower central costs and a reduction in the effective tax rate. The Group continues to generate healthy cash flows and the overall financial position remains strong.
The 2019 full year results will be announced on Monday 2 March 2020.
Notes
(1) Adjusted earnings per share is before amortisation of intangible assets from acquisitions, loss on disposals and other adjusting items including restructuring costs, all net of tax.
This announcement contains inside information.
Further information
Gulshen Patel and Jennifer Ramsey | Director of Investor Relations, Senior plc | +44 (0) 1923 714 722 |
Bindi Foyle | Group Finance Director, Senior plc | +44 (0) 1923 714 725 |
Philip Walters | Finsbury | +44 (0) 20 7251 3801 |
About Senior
Senior is an international manufacturing group with operations in 13 countries. It is listed on the main market of the London Stock Exchange (symbol SNR). Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide aerospace, defence, land vehicle and power and energy markets. Further information on Senior plc may be found at: www.seniorplc.com
Cautionary Statement
This announcement contains certain forward-looking statements. Such statements are made by the Directors in good faith, based on the information available to them at the time of the announcement, and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.