Rolls-Royce PLC (LON:RR.) shares soared higher on Friday as it once again maintained its full-year guidance despite saying that problems with its Trent 1000 engine, which has grounded some planes, could cost it an extra £100mln this year.
In a statement, the FTSE 100-listed group said it is sticking to guidance for this year's free cash flow to come in at about £450mln, give or take £100mln despite the extra cost.
READ: Rolls-Royce confirms plans to cut 4,600 mainly UK jobs
The engine maker added that it has “successfully enacted a number of short-term discretionary cost mitigation actions separate to, and outside of, the proposed restructuring plan, which we expect to offset these incremental costs.”
The firm also announced ambitious new mid-term financial targets, saying it is aiming for free cash flow per share to exceed 100p in the mid-term.
That compares to the current 15p per share of free cash flow it made in 2017 and the group said it will be helped by its restructuring plan, unveiled on Thursday, which it said will save £400mln a year by 2020.
The latest update, given as the firm hosted its 2018 Capital Markets Event, came a day after Rolls-Royce confirmed it is to cut 4,600 jobs, predominantly in the UK, as part of a plan to simplify its business and save £400mln a year by the end of 2020.
The group said the job cuts and overhaul of its business would cost it £500mln and be spread across 2018, 2019 and 2020.
After rising yesterday on the cost cutting moves, Rolls-Royce shares jumped 12.8% higher in early Friday trading to 995.4p.