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Shares in Rolls-Royce (LON:RR.) surged by almost 15% as investors decided a halved final dividend was better than nothing.
The aeroengine maker saw underlying profits tumble by 12% to £1.43bn in 2015, but this was ahead of market forecasts while revenues were flat at £13.7bn.
A lower dividend had been widely expected and new boss Warren East said it needed to sustain a healthy balance sheet to maintain a strong investment grade credit rating.
But he added the company recognised the need to pay a 'healthy' dividend to shareholders.
East has already instigated a cost cutting plan that will see 20% of senior management swept away and said more restructuring is on the cards for 2017.
Exceptional costs will amount to £75-100mln in 2016 with costs savings of £145mln expected by end 2017.
East added the outlook for 2016 was unchanged with a steady performance in civil aerospace and weak offshore markets in marine.
However he added repeated that with £650mln of “headwinds” in the current year, underlying profits fall substantially in 2016.
The company has been airlines retiring older engines earlier than expected, which has hit maintenance and newer models have struggled to fill the gap.
Orders for the year ahead were up by 4% he added, while cashflow was better than expected at £179mln.
Reported profits were £160mln (£47mln).
Mike van Dulken, from Accendo Markets, said that after five profits warnings the absence of another, maintenance of trading guidance and no rights issue was “probably the real news.”
Investec added that after the postive first pages there wasa series of concerning details in the increased divisional disclosures, including lower order intake in power systems and guidance for increased costs at defence and nuclear.
Shares rose 95p to 625p.