Aerospace, defence and energy components contractor Senior (SNR) has pushed through a second round of job cuts after a Covid-19 slump in sales. It previously cut 400 jobs last autumn.
Revenue for the six months to 30 June plunged 30%, the company said in a pre-close half year trading update. The news triggered a near-7% decline in its share price to 56.55p, having been over 300p in late 2018.
This time last year the company reported first-half sales of £580.4 million, so investors are looking at around £406 million in 2020’s first six months.
Profit margins were also ‘significantly’ lower, the company said, prompting Senior to cut its workforce by another 12%. About 19% of its staff remain on furlough.
In mid-2019 Senior had about 8,200 employees, but the company subsequently reduced that number by about 5% between June and December 2019.
The global pandemic has had far-reaching consequences for Senior. It warned of a ‘significant’ cut to the balance sheet value of certain intangible assets, while it anticipates a jump in restructuring costs of up to £35 million. It had originally predicted £23 million of one-off charges.
It is hoping for £35 million a year of cumulative savings this year.
The near-term future remains tough. Senior expects the massive slump in civil aerospace production rates to continue for the rest of 2020 and beyond into 2021.
‘While it is likely to take several years for air traffic to return to 2019 levels, the demand for air travel is expected to continue to grow in the medium and long term,’ Senior optimistically said.