Senior shares sink, customers delays to hit full-year results

8th Oct 2024 07:49

(Sharecast News) - Shares in Senior tanked on Tuesday after the engineering solutions provider announced that the ongoing supply and logistical challenges hitting the wider aerospace sector will have an impact on full-year results.

Senior, which makes high-tech components and systems for OEM manufacturers in the aerospace, defence, land vehicle, power and energy markets, now expects aerospace results in the second half to be lower than the first due to "temporary near-term customer related headwinds".

The FAA's ruling to restrict Boeing's 737 MAX production following the mid-air Alaskan Airlines incident earlier this year has limited production, while an ongoing employee strike at Boeing's commercial aircraft operations in the Puget Sound area is having an impact, Senior said.

Meanwhile, Airbus has had it own supply chain challenges, particularly on engines and interiors, and there now appears to be an imbalance of supply into different parts of the aircraft. One of Senior's customers is an Airbus Tier 1 supplier, recently said they would significantly reduce scheduled deliveries from Senior over the next two quarters.

"While the full impact on our businesses exposed to the affected programmes is not yet certain, we have moved decisively to contain costs and preserve cash," Senior said.

Group revenues were up 5% at constant currency in the third quarter, down from 7% growth over the first half, as 13% growth in aerospace was weighed down by a 9% decline at the Flexonics division.

The stock was down 15.8% at 123.6p by 0839 BST, touching a 52-week low of 120p earlier on.