2nd Mar 2020 08:23
(Alliance News) - Engineering firm Senior PLC reported "robust" annual results on Monday despite the grounding of Boeing Co's 737 MAX causing disruption, though it has warned on a fall in 2020 revenue.
Senior's revenue increased 3% in 2019 to GBP1.11 billion, but excluding currency movements, the figure actually declined by 1%.
Pretax profit for the year fell by 53% at actual rates to GBP28.7 million, and the adjusted figure declined by 5% to GBP78.5 million. Senior's profit was hit by a GBP22.0 million loss in disposal following the sale of its Flexonics operations in France early in 2019.
Rickmansworth, Hertfordshire-based Senior has proposed a final dividend of 5.23 pence per share. This would take the year's total to 7.51p, meaning a 1.2% year-on-year increase.
Senior's aerospace division, which makes up the bulk of operations, managed to increase revenue by 5.9% to GBP835.4 million, but adjusted operating profit in the unit fell 8.7% to GBP76.4 million.
Senior said the revenue growth was achieved despite the grounding of the 737 MAX following two fatal crashes. It mitigated this through "stronger sales on other civil and military programmes", the company said.
In 2020, Senior expects Aerospace revenue to drop by around 20%, with performance weighted to the second half.
Flexonics revenue fell 16% to GBP275.8 million, with adjusted operating profit down 2.2% to GBP26.1 million. The market is weakening, Senior noted, and it expects this to continue in 2020.
"The impact of the anticipated sales reduction in both divisions will only be partially mitigated by savings from the restructuring programme and therefore margins in both divisions in 2020 are likely to be lower than those achieved in 2019," said Senior.
"Senior delivered robust full-year results for 2019 with adjusted earnings per share growth and a strong free cash flow performance. This result has been achieved in a period where the business has faced challenges caused by the grounding of the Boeing 737 MAX fleet," added Chief Executive David Squires.
"It is clear 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."
Looking ahead, Senior also said it is monitoring the coronavirus outbreak and how the macroeconomic disruption could affect its end markets and supply chains.
"However, we entered 2020 with a robust balance sheet and a continued focus on cost, efficiency and cash generation. We are taking firm actions to restructure the business and have every confidence in returning to growth in 2021," CEO Squires added.
Shares in Senior were up 8.2% at 152.80 pence each in London on Monday morning.
By George Collard; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Senior