31st Jan 2020 09:20
(Alliance News) - FTSE 250-listed aerospace and defence engineer Senior PLC said Friday its Aerospace unit's revenue will be down 20% in 2020 due to the ongoing suspension of production of Boeing Co's 737 MAX.
Senior noted it has exposure to the 737 MAX programme through several of 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, Senior added.
The company continued: "It is now evident that the 737 MAX build-rate and pace of production ramp up will be below the board's assumptions."
Senior has previously said its Aerospace unit will generate less revenue in 2020 compared to 2019, but then expects a return 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," Senior said.
The company noted the drop in sales will be partially offset from savings from the ongoing restructuring of the unit.
For 2019, Senior expects its group revenue to be in line with expectations.
"The group continues to generate healthy cash flows and the overall financial position remains strong," Senior added.
In 2018, Senior reported pretax profit of GBP61.3 million on revenue of GBP1.08 billion.
The company expects to publish its 2019 results on March 2.
Shares in Senior were up 0.9% in London on Friday morning at 168.60 pence each.
By Paul McGowan; [email protected]
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