By Yadarisa Shabong
(Reuters) - British Boeing (NYSE:BA) supplier Senior (L:SNR) expects sales and margins across its divisions to shrink in 2020, weighed down by the halt in production of 737 MAX jets and by weaker demand from its clients in the car and oil and gas industries.
The company as promised in January beat market expectations for profit in 2019 but still saw a 9% fall in its adjusted bottom line and a more than halving of pre-tax profits.
It raised its dividend by 1 percent and said it was taking firm action to restructure its business and ensure it returned to growth in 2021.
Boeing's decision in December to suspend production of its 737 MAX jets led Senior last month to warn of a 20% fall this year in revenue at the aerospace divisions which bring in the lion's share of its revenues.
Those woes have been compounded by economic forecasts that suggest end markets at its flexonics division, which makes parts for a range of industrial sectors, will continue to decline in 2020, prompting it to warn that revenue at the smaller division would also be lower in 2020.
"It is clear that our performance in 2020 will continue to be affected by the 737 MAX situation and the company is taking all necessary actions to mitigate the impact," Chief Executive Officer David Squires said.
Senior's aerospace unit makes MAX parts including airframes and engine build-up tubes directly for Boeing, while also supplying parts to other manufacturers involved with the MAX programme.
The company said the anticipated decline in sales across its divisions this year would be mitigated by savings from the restructuring, initial details of which it announced last November.
Adjusted pretax profit for the year ended Dec.31 fell 9% to £78.5 million. Analysts on average estimated pretax profit of £72.97 million for 2019, according to Refinitiv IBES data.