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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

Plane construction
The company has been hit by the grounding of Boeing 737 MAX planes

Senior Plc (LON:SNR) shares fell on Thursday after the aircraft component maker announced a £20mln restructuring programme to address low revenues at its flexonics and aerospace divisions, although it said its full-year performance will be in line with expectations.

In a trading update, the FTSE 250-listed company said it will reduce headcount, transfer major work packages to South East Asia and close a South Carolina plant by early 2020, with costs from these actions to be recovered over the next two years without impacting the net cash flow.

READ: Senior slides further as Peel Hunt joins in with Boeing-related downgrades

Since September, Senior has sold two non-core businesses, which accounted for less than 2% of 2018 group revenue, “slightly” adding to its 2019 adjusted earnings.

The company said its flexonics division, which produces automotive and industrial components, saw activity in line with expectations, although its markets have been weakening since the summer and are unlikely to recover before 2021.

The aerospace division reported revenue growth in the first ten months to 31 October, however 2020 sales are expected to dip before rising again in 202, the firm added.

“In recognition of the challenges in some of our Flexonics and Aerospace markets, Senior is implementing a restructuring programme to drive improved returns,” said chief executive David Squires in the statement.

“Combined with a slightly lower forecast tax rate and lower central costs, this means that the Group's performance in 2019 will be broadly in line with our expectations,” he added.

Senior shares were down 5% to 178p on Thursday morning.

Quick facts: Senior PLC

Price: 174.2 GBX

LSE:SNR
Market: LSE
Market Cap: £730.63 m
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