The aero-engine maker Rolls-Royce PLC (LON:RR.) is sticking with its full-year earnings guidance even though its first-half performance comfortably beat expectations.
It warned the outlook for the remainder of the year was ‘mixed’.
The civil aviation market and demand for large power units helped drive revenues 6% higher to £7.56bn in the six months ended June.
READ: Rolls-Royce unsettled by news of FRC accounts probe; AGM update reveals outlook unchanged
Rolls underlying profits up strongly
Underlying profits advanced 148% to £287mln, which was well ahead of City estimates that hovered around the £158mln mark.
Free cash flow was £399mln, an improvement of 18%. However, Monday saw it warn that its £1bn long-term target was aspirational rather than a firm goal.
Last year’s numbers marked the nadir for the company after it booked a record loss following a £671mln settlement with regulators for past bribery and corruption.
The engineer, which is in the middle of a turnaround under chief executive Warren East, said restructuring savings from this process were well “ahead of plan”.
No room for complacency, says boss
The Rolls boss added: “Two years ago we set out a programme of change to drive efficiency and sharpen our focus on execution.
“Our strengthened management team is making good progress in simplifying the organisation and driving the pace of necessary change to develop a more resilient and sustainable business. However, this is no time for complacency.”
The interim pay-out is being held at 4.6p a share.