Senior kicks off £20mln restructuring programme after weak performance
The company will reduce headcount, transfer major work packages to South East Asia and close a South Carolina plant by early 2020
Company
LON:SNR
Senior is an international manufacturing group with operations in 11 countries. Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide civil aerospace, defence, diesel engine, exhaust system and energy markets.
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The company will reduce headcount, transfer major work packages to South East Asia and close a South Carolina plant by early 2020
The aerospace designer's share price has halved after major customer Boeing was forced to ground its best-selling aircraft 737 Max earlier this year
Boeing’s 737 Max aeroplanes have been grounded around the world after crashes in October and March
Barclays expects an inventory build since the planes were grounded and production cut, which means it will take a while for deliveries to ramp back up to normal levels
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A look at some of the biggest risers and fallers in London on Thursday
In an update, the FTSE 250-listed aerospace engineer said overall trading has been in line with expectations but said it is expecting some impact from the 737 MAX situation
The UK group noted that Boeing has stated that they "expect T-X to be a franchise program for much of this century"
Senior expects a "slight decline" in sales at its flexonics division in 2019 but this will be offset by improved margins
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The UK blue-chip benchmark finished around 27 points higher at 7,134
Hardware & electrical equipment
Derek Harding was the chief financial officer at rival engineering group Senior between 2013 and 2017, so he should know a thing or two about the industry
The UK's premier blue-chip index closed down around 12 points at 7,004
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Findel's October update will have most likely covered any surprises in its interims, while the US's third-quarter GDP could move from the previous reading of 3.5%
The FTSE 100-energy group said Charles Berry would be appointed initially as a non-executive director before taking over from Rick Haythornthwaite on 21 February 2019
Analysts praised last week’s “very strong” first-half revenue growth and said margins have the potential to pick up, but they think the recent share price rise and more positive outlook make other stocks more appealing
For the six months ending on 30 June, the FTSE 250-listed engineer saw its pre-tax profits jump by 20% to £39.0mln, beating estimates for around £37.0mln
FTSE 100 closed down 0.46 points, or 0.01% at 7,700 on Monday
Senior's revenue increased by 12% to £1.023bn, up from £917mln a year earlier, exceeding the £1bn level for the first time
London's blue-chips closed up around 45 points but below the 7,300 level
The outperformance was driven by a good performance in November and December
Hardware & electrical equipment
Berenberg cut its target for the defence contractor to 1,300p from 1,550p and reiterated a ‘sell’ rating on the stock, noting a recent rally by the shares