(Bloomberg) -- Senior Plc fell the most in more than four years after the UK aerospace parts supplier warned of lower near-term sales to Airbus SE and Boeing Co. amid supply chain issues and a crippling strike at the US planemaker.
The stock fell as much as 18% in London trading, the most since Aug. 3, 2020, to its lowest point since the start of last year. The shares have lost 28% in value this year.
In response to the temporary slowdown, London-based Senior will cut jobs through furloughs and permanent headcount reductions, as well as curb discretionary spending and postpone some capital expenditure to preserve cash, the company said in a stock exchange filing.
While production of Boeing’s workhorse 737 Max jet has been hit by a worker strike in its Seattle-area plants now entered its fourth week, Airbus’s production remains out of sync as the European planemaker struggles with the supplies of interiors and engines. As a result, suppliers to Airbus will “significantly reduce” deliveries from Senior in the fourth quarter of this year before returning to normal in the second quarter of 2025, according to the filing.
“We are doing everything we possibly can to mitigate the issues we’re currently facing,” Chief Executive Officer David Squires said on an analyst call. The issues are “temporary in nature,” the CEO said, adding he’s confident next year will see an improvement.
As a consequence of the “temporary near-term customer related headwinds,” the aerospace division will show a performance in the second half that’s below the first six months, Senior said.
(Updates with CEO quote.)
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