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Senior reiterates FY guidance as Boeing suspends 737 MAX
17th Dec 2019 12:01
(Sharecast News) - Engineering group Senior reiterated full year guidance given earlier this month as the company dealt with the impact of Boeing's decision to suspend production of its 737 MAX passenger jet.
Senior last week confirmed it was considering a sale of its aerostructure unit after recent speculation. Its shares fell sharply on Tuesday on the Boeing announcement. The company makes oxygen tubes and other engine components for Boeing.
"The board notes the announcement made by Boeing concerning its suspension of 737 MAX production starting in January 2020 pending the certification and return to service of the airplane. Senior continues to work closely with Boeing and its other customers to support this programme," the company said in a statement.
"Senior will provide a further update on the potential implications to its 2020 performance once it has clarification from its customers. The board's expectations for the group's 2019 performance remains unchanged from the announcement released on 7 November 2019."
At the time Senior announced a restructuring programme amid difficulties in its Flexonics and aerospace markets.
As part of the restructuring programme, Senior planned to align direct headcount to match capacity to the sales demand and implement further efficiency improvements to cut overheads.
It added that it was transferring major work packages to South East Asia and closing Senior Aerospace AMT's South Carolina facility next year.
Senior said the moves would result in a total restructuring charge of around £20m, with a significant portion coming from job losses.
The company said revenue in the aerospace division grew year-on-year in the first 10 months of 2019, but revenue in the last four months was lower than it expected due to weakness in wide-body commercial aircraft engine demand and the impact of the 737 MAX situation.
Senior last week confirmed it was considering a sale of its aerostructure unit after recent speculation. Its shares fell sharply on Tuesday on the Boeing announcement. The company makes oxygen tubes and other engine components for Boeing.
"The board notes the announcement made by Boeing concerning its suspension of 737 MAX production starting in January 2020 pending the certification and return to service of the airplane. Senior continues to work closely with Boeing and its other customers to support this programme," the company said in a statement.
"Senior will provide a further update on the potential implications to its 2020 performance once it has clarification from its customers. The board's expectations for the group's 2019 performance remains unchanged from the announcement released on 7 November 2019."
At the time Senior announced a restructuring programme amid difficulties in its Flexonics and aerospace markets.
As part of the restructuring programme, Senior planned to align direct headcount to match capacity to the sales demand and implement further efficiency improvements to cut overheads.
It added that it was transferring major work packages to South East Asia and closing Senior Aerospace AMT's South Carolina facility next year.
Senior said the moves would result in a total restructuring charge of around £20m, with a significant portion coming from job losses.
The company said revenue in the aerospace division grew year-on-year in the first 10 months of 2019, but revenue in the last four months was lower than it expected due to weakness in wide-body commercial aircraft engine demand and the impact of the 737 MAX situation.