Rolls-Royce Holdings PLC (LSE:RR.) reported its transformation programme is “moving at pace” as it told investors trading is in line with expectations.
In a statement ahead of the group’s AGM, chief executive Tufan Erginbilgic said: “We are making good progress and our financial performance year-to-date is in line with expectations.”
“We are transforming Rolls-Royce into a high quality and competitive business with a strong balance sheet and growing profit, cash flows and returns.”
The FTSE 100-listed firm said its underlying operating profit guidance of £0.8-1.0bn and free cash flow guidance of £0.6-0.8bn in 2023 is unchanged while it anticipates free cash flow generation to be seasonally weighted to the second half of the year.
In Civil Aerospace, long-term service agreement large engine flying hours were 83% of pre-pandemic 2019 levels in the four months to 30 April 2023, and on track for the 80% to 90% range for the full year, as guided in February.
Shop visit volumes and OE deliveries are also on track with expectations, Rolls-Royce said.
In Power Systems, revenue growth is being driven by demand for aftermarket services and exceptionally high order intake in the prior year, especially for power generation solutions.
“We are getting improved pricing on new orders which will drive margins up with the benefits expected to start showing in the second half of the year,” it said.
Rolls-Royce said work on the transformation programme is moving at pace and the increased focus on efficiency and simplification is helping to keep costs down.
“Our strategic review is on track and as previously indicated, we will communicate the findings and medium term targets in the second half of 2023,” the company added.