Rolls-Royce Holdings PLC (LON:RR.) has reiterated its profit and cash flow guidance for 2018 and said it is making progress with plans for increased inspections of problematic Trent 1000 airplane engines.
In a statement to be delivered at its annual general meeting today in Derby, the FTSE 100-listed group’s chief executive Warren East said “the year has started well and that trading is in line with our expectations.”
READ: Rolls-Royce to step up inspections on Trent 1000 jet engines as some turbine blades wearing out faster than expected
The engineer’s boss added: “We continue to make significant progress with our simplification programme; we have slimmed down the Group to three divisions from the previous five and we are making good progress with the diagnostic phase of the restructuring programme that we announced in January, the results of which will be shared in June.”
He continued: “While the requirement for more regular inspections will lead to higher than previously guided cash costs, in response to this we have reprioritised various items of discretionary spend to mitigate these incremental cash costs. Accordingly, we are maintaining our profit and cash expectations for 2018."”
The group said it will be announcing its half-year results on Thursday August 2 and it expects trading to follow the pattern of previous years with first-half cash outflows reversed in the second half and group profit also heavily second half weighted.
Rolls-Royce added: “The 2018 outlook excludes the year-on-year effect of foreign exchange translation and any acquisition or disposal activity on our reported results.”
Shares easier
In a note to clients, analysts at UBS said: “Investors are looking beyond year-to-date trading and are focused on understanding the underlying progress on new engine losses reduction, aftermarket revenues/profit growth, excluding any elements that are less operational such as leases, concessions.”
They repeated a ‘buy’ rating and 1,060p price target on Rolls-Royce shares.
In early morning trading, the engineer’s shares were 1.2% lower at 827p.
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