UK's Senior warns of hit to aerospace revenue, margins from MAX grounding

(Reuters) – Britain’s Senior Plc (L:), which makes parts like airframes and engine build-up tubes for Boeing Co’s (N:) 737 MAX jets, said on Friday revenue and margins at its aerospace division will decline in 2020 because of the MAX grounding.

In November, the engineering company warned that revenue would be lower, although it did not mention by how much. It believed at the time that margins would remain at same levels in the second half of the year.

“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,” Senior said in a statement.

The company has been in talks with several customers, who are exposed to the MAX program, as each customer may have different needs depending on inventory levels and other factors, it said.

However, it said group revenue is expected to be in line with expectations and adjusted earnings per share to be ahead of forecast due to one-off benefits from lower costs.

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