24th Apr 2020 09:41
(Alliance News) - Aerospace and defence components maker Senior PLC on Friday warned that coronavirus is causing a significant disruption to its end markets, resulting in a fall in customer demand.
The company said trading for the three months to March-end was slightly ahead of management expectations, despite the "tangible" impact of the virus crisis during March which has continued into April.
"Our defence and industrial power & energy after-market businesses are robust which is helping to partially offset the impact of the coronavirus pandemic on civil aerospace, land vehicle and oil & gas markets," the company explained.
The FTSE 250-listed company, however, suspended its financial guidance for 2020 as it believes the pace and duration of recovery remains unknown.
Due to the health crisis, Senior has furloughed 17% of its employees and is continuing with the restructuring programme, which commenced in 2019.
The company's directors and Chair Ian King have decided to take a 20% cut to their fees for a three-month period
Senior also has decided to curtail capital expenditure, tightly manage working capital and implement further cost cutting actions.
At December 31, the company had committed borrowing facilities of GBP305 million and had lending headroom of GBP159 million under those facilities. The company's UK and US banks have also agreed covenant relaxations in relation to the June and December testing periods to provide flexibility.
Senior additionally said that it has decided against divesting its Aerostructures business in the best interests of the company, despite receiving strong interest from buyers. In December, the company had confirmed it was reviewing strategic options for its Aerostructures business, which included a potential divestment of the division.
Shares in Senior were trading 1.4% lower at 60.00 pence each in London on Friday morning.
By Tapan Panchal; [email protected]
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