Senior expects lower FY sales following 737 MAX halt

Manufacturing company Senior expects full-year sales and margins to fall in 2020 as a result of the extended halt in production of Boeing's 737 MAX aircraft and weakened demand from clients in the automotive and energy industries.

Boeing's move to suspend production of its 737 MAX planes in December saw Senior warn that revenues in its aerospace unit would likely drop about 20% year-on-year. Senior also cautioned that some troubling economic forecasts had impacted its flexonics wing, with both its top and bottom line on track to continue declining in 2020.

However, Senior said the decline in sales would be somewhat offset by savings made from its restructuring programme, initially revealed back in November.

Chief executive David Squires said: "It is clear that our performance in 2020 will continue to be affected by the 737 MAX situation and the company is taking all necessary actions to mitigate the impact."

As far as Senior's 2019 results were concerned, the FTSE 250-listed firm's full-year profits came in ahead of expectations, even if they fell.

Adjusted pre-tax profits fell 9% to £78.5m, ahead of analyst estimates of £72.97m, while operating profits declined 12% to £61.6m and basic earnings per share slid 45% to 7.04p.

Revenues actually increased by 3% to £1.10bn.

Senior raised its dividend by 1% to 7.51p and vowed to take firm restructuring action as part of its efforts to ensure the group returned to growth in 2021.

As of 0825 GMT, Senior shares were down 0.91% at 141.20p.