Business
Market Update - Impact of 737 MAX and 2019 trading
Market Update - Impact of 737 MAX and 2019 trading.
About this update from Senior Plc
[{"type":"text","content":"\n \nRNS Number : 5488B Senior PLC 31 January 2020 \n\nSenior plc\nMarket Update - Impact of 737 MAX and 2019 trading\nSenior plc (\"Senior\" or the \"Group\"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace, defence, land vehicle and power & energy markets, today issues this market and trading update.\nOn 17 December 2019, the Board noted Boeing's announcement concerning its suspension of the 737 MAX production from January 2020, pending certification and return to service of the airplane. At the time, the Board said it would provide a further update on the potential implications to its 2020 performance once it had clarification from its customers.\nWhile 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. It is now evident that the 737 MAX build-rate and pace of production ramp up will be below the Board's assumptions at the time of our Trading Update on 7 November 2019, prior to Boeing's decision to temporarily halt production. Senior has exposure to the 737 MAX programme through several customers, each of whom may have different requirements depending on a number of factors, including their inventory levels.\nIn our Trading Update on 7 November 2019 the Board noted that revenue in our Aerospace Division will be lower in 2020 than in 2019, before returning 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. The impact of the anticipated sales reduction will only be partially mitigated by savings from our ongoing restructuring programme and as a consequence, our Aerospace margins in 2020 will be lower than that achieved in 2019.\nFor the full year 2019, subject to audit, Group revenue is expected to be in line with expectations and adjusted earnings per share(1) are now expected to be ahead of the Board's previous expectations due to one-off benefits from lower central costs and a reduction in the effective tax rate. The Group continues to generate healthy cash flows and the overall financial position remains strong...