TIDMSNR
RNS Number : 7245K
Senior PLC
24 April 2020
Senior plc - Market Update
Ahead of its Annual General Meeting later today, Senior plc
("Senior" or "the Group"), an international manufacturer of high
technology components and systems, principally for the worldwide
aerospace, defence, land vehicle and power & energy markets,
issues this market update.
Coronavirus (COVID-19) update
The Health and Safety of our employees remains our highest
priority. We are providing best practice guidelines to all of our
businesses and are following national and local government
instructions and guidance in the multiple jurisdictions in which we
operate. We continue to pay special attention to those in our
community who are most vulnerable and we are doing all that we can
to support our employees during this unprecedented crisis.
Daily oversight of employee welfare and business continuity
plans is being undertaken by senior executives, chaired by the
Group Chief Executive Officer.
The actions taken have proved effective and have allowed all of
our operations to remain open, other than a small number where
national governments have mandated a total shutdown.
Coronavirus (COVID-19) is causing significant disruptions to our
end markets and their respective supply chains, with customer
demand falling as activity levels have reduced. As a consequence,
it has been necessary to furlough significant numbers of employees
in those businesses most affected by the downturn. Where government
assistance is not available to financially support furloughs, for
example in South Africa, we have ensured that we continue to pay
our employees.
At the same time, the Executive Directors, the Chairman and the
Non-Executive Directors are reducing their salaries and fees by 20%
for a three-month period and the situation will be reviewed at the
end of that period. The other members of the Executive Committee
and senior leaders throughout the business are also taking a
reduction in their salaries.
Until the extent and duration of the disruption is better
understood, the Group continues to focus on taking actions to
conserve cash to manage through the crisis, including curtailing
capital expenditure, tightly managing working capital and
implementing further cost cutting actions. Around 17% of the
Group's employees are currently on furlough and the restructuring
activities, which commenced last year, are further adapting to the
changing end market conditions.
Financial facilities
At 31 December 2019 our committed borrowing facilities were
GBP305m with an average maturity of 4.4 years and the Group had
headroom of GBP159m under these committed facilities. Net Debt was
GBP230m, including GBP84m of capitalised leases following the
adoption of IFRS 16 which do not form part of the definition of
debt under the committed facilities and do not impact the Group's
lending covenants. We have two covenants for our committed
borrowing facilities which are tested at June and December: our net
debt to EBITDA must not exceed 3.0x and our interest cover must be
higher than 3.5x.
The Group has very supportive lenders, both banks and US private
placement investors. With our UK and US banks, we have agreed
covenant relaxations in relation to the June and December 2020
testing periods to provide flexibility should this be needed. We
are concluding discussions with our four US private placement
investors to agree covenant relaxations.
We have undertaken extensive scenario testing for 2020, based on
a variety of end market assumptions, while taking account of
appropriate cost reduction and cash preservation mitigating
actions. Against this set of assumptions, our assessment shows that
the Group has sufficient liquidity under its existing committed
facilities without utilising other funding sources that would be
available to it.
Update on strategic review of Aerostructures business
On 9 December 2019 Senior confirmed it was reviewing strategic
options for its Aerostructures business, which included a potential
divestment of the Division. Although Senior received strong
interest for the business, the Group has determined that it is in
the best interests of Senior and its stakeholders for the
Aerostructures business to remain within the Group.
Senior support to health and care workers
Senior is a long-term term supplier of parts in numerous medical
applications, for example critical parts for ventilators, and we
have explored other ways in which we can support frontline medical
staff. Specifically, since March we have been providing many
thousands of NHS Trust approved face visors to UK hospitals,
medical practices and care homes and in April increased our
manufacturing capacity to 10,000 per day in response to the
overwhelming demand for this vital PPE kit.
Trading update
Trading for the three months ended 31 March 2020 was slightly
ahead of our expectations coming into the year, despite the
tangible impact of coronavirus during March which has continued
into April.
We are continuing with the restructuring plan, which is
delivering the expected benefits and we remain focused on taking
further actions as appropriate to manage the business through the
current crisis.
Our defence and industrial power & energy aftermarket
businesses are robust which is helping to partially offset the
impact of the coronavirus pandemic on civil aerospace, land vehicle
and oil & gas markets.
While macro-economic recovery is expected over the medium-term,
the pace and duration of recovery remains unknown. Therefore,
guidance for 2020 remains suspended.
Notes
This announcement contains inside information.
Further information
Group Finance Director, Senior +44 (0) 1923 714
Bindi Foyle plc 725
Director of Investor Relations, +44 (0) 1923 714
Jennifer Ramsey Senior plc 722
+44 (0) 7796 708
Richard Webster-Smith Finsbury 551
About Senior
Senior is an international manufacturing group with operations
in 13 countries. It is listed on the main market of the London
Stock Exchange (symbol SNR). Senior designs, manufactures and
markets high technology components and systems for the principal
original equipment producers in the worldwide aerospace, defence,
land vehicle and power & energy markets. Further information on
Senior plc may be found at: www.seniorplc.com
Cautionary Statement
This announcement contains certain forward-looking statements.
Such statements are made by the Directors in good faith, based on
the information available to them at the time of the announcement,
and they should be treated with caution due to the inherent
uncertainties underlying any such forward-looking information.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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