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Senior PLC on Tuesday warned that the strike at Boeing Co, plus other short-term issues, will hurt its own trading. The Rickmansworth, England-based engineering firm said the strike at US airline manufacturer Boeing, which is now in its fourth week, will have an ‘inevitable impact on our operating businesses most exposed to this customer, both directly and through its Tier 1 suppliers.’ In addition, Senior, which supplies components and systems principally for the aerospace & defence, land vehicle and power & energy markets, noted that Boeing rival Airbus SE has been publicly clear about the supply chain challenges it has been facing, particularly on engines and interiors. Senior said it has been informed by an unnamed customer - which it described as a ’tier 1’ supplier to Airbus - that the customer intends to ‘significantly reduce’ scheduled deliveries from Senior in the fourth quarter of this year before returning to normal during the second quarter next year. As a result, Senior expects Aerospace second half performance to be lower than the first half. It still expects on-year growth in the division, however. In Flexonics, full-year expectations are broadly unchanged, with first half performance higher than the second. The news sent shares in Senior down 11% to 130.00 pence each in London on Tuesday morning. The stock fell as low as 120.00p, a new 52-week low. In response, Senior said it has taken cost and cash actions to help mitigate the impact of the challenges. These include temporary furloughs and job losses, cuts to discretionary spending, and postponing uncommitted capital expenditure. Senior said it will remain ‘comfortably’ within its debt covenant limits. Looking ahead, the firm said the short-term issues are clearly ‘temporary’. In the nine months to September 30, Senior said revenue rose 5% on-year on a constant currency basis. Aerospace revenue grew 13% on-year driven by growth in commercial aerospace and as previously indicated, Flexonics revenue reduced by 9% compared to prior year. ‘The group’s future growth is underpinned by a robust order book and is well positioned in its markets and with its customers to capture further new business. Increasing aircraft build rates, operational efficiency benefits and improved price agreements are expected to drive good growth in Aerospace division performance beyond 2024, and we remain confident of continuing to out-perform the key end markets in which our Flexonics division operates.’ Copyright 2024 Alliance News Ltd. All Rights reserved.
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