Rolls-Royce sees profits leap

Profits have risen by 148% at Derby-headquartered Rolls-Royce for the six months to 30 June, but the firm has seen its cash reserves drop by 31% over the same period.

The firm made a profit of £287m during the past six months, compared to £104m last year. Revenues were also up slightly – by 6% to £6.9bn.

Warren East, chief executive, said: “Rolls-Royce delivered encouraging year-on-year operational progress in the first six months of the year.

Civil Aerospace large engine deliveries increased 27% and we made good further progress improving Trent XWB OE economics. Restructuring savings were ahead of plan.

Together with a higher than expected benefit from long-term contract accounting adjustments, this resulted in a good set of results, with financial performance ahead of our expectations for the first half.

Looking to the balance of the year, execution and delivery of a number of important milestones across our businesses will be key to achieving our full year expectations. Our outlook for full year profit and cash remains unchanged.”

He added: “Two years ago we set out a programme of change at Rolls-Royce 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. Strong execution and a focus on delivering our customer commitments remains essential as we continue to manage in-service issues in Civil Aerospace alongside key new product introductions and increased production volumes. Our long-held commitment of investing in R&D and future technologies remains unchanged, as we look to secure the long-term success of the business, built on a solid platform of outstanding customer service and strong cash flows.”

Rolls-Royce says its outlook for 2017 remains unchanged.

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