Savings for 2020 are still expected to be around £35mln but restructuring charges from the creation of a single aerospace division and relocation of some European operations will amount to around £37mln this year, with cash outflow for the year now predicted to be around £20mln this year with another £8mln expected in 2021.
Aerospace sales in the third quarter were 45% lower than the same period last year on a constant currency basis, worsening from the 40% decline in the second quarter and 22% in the first, as demand has been significantly reduced as a result of the ongoing impact of COVID-19 on air travel and Boeing’s issues with its 737 MAX plane.
Aerospace sales in the third quarter declined 18% relative to the second as civil aerospace manufacturers cut production and supply chain rebalancing continues.
In Flexonics, the performance benefited from improved conditions in the heavy-duty truck and passenger vehicle markets but was offset by continuing weakness in the oil & gas sector, with sales in the third quarter down 25% year on year, versus a 33% decline in the second quarter and 23% in the first.
Chief executive David Squires said: “We may yet see some short-term changes in customer requirements due to COVID-19 which could impact Q4 2020, however, overall, the board’s current expectations for 2020 are broadly in line with market expectations.
“In the near term, the board believes that the consequences of the pandemic will continue to impact our business. While it is too early to be definitive about the timing of the recovery, given the unpredictable nature of the pandemic, it is likely to be 2022 before we see a meaningful recovery in group revenues.”
The shares, down almost 80% over the past two years, were up almost 1% to 55.92p in early trading on Tuesday.