Rolls-Royce returns to profit after signing £350m fighter jets contract
The Ministry of Defence (MoD) has signed a contract worth almost £350m with Rolls-Royce to support the engines that power the UK’s fleet of Typhoon fighter jets.
The contract will support around 175 Rolls-Royce jobs in Bristol, RAF Coningsby in Lincolnshire and RAF Lossiemouth in Moray will be supported as part of the contract.
The £346.7m contract will provide maintenance support for the EJ200 engine up to 2024 as the Typhoon continues to form the backbone of the RAF’s fighter jet fleet.
Defence Minister Anne-Marie Trevelyan said: “Not only will this contract help to maintain our world-class jets, it secures 175 jobs across the UK and boosts the skills base our world-leading defence industry relies upon.
“Together with our multi-million-pound upgrade programme, this contract will ensure our Typhoon fleet continues to dominate the skies in the decades to come.”
Meanwhile, Rolls-Royce has swung back into the black after its restructuring programme reaped rewards for the first six months of 2019.
The company made a profit of £83m during the period, compared to a loss of £747m in 2018. Meanwhile, revenues rose by 7% to £7.35bn.
Rolls-Royce said its restructuring plan was on course to save it £134m this year, with further acceleration in the second half of the year.
Warren East, chief executive, said: “We delivered further progress across the group in the first half in line with our full year expectations. We expect a significant improvement in cash in the second half as we unwind inventory built up to support customer deliveries and benefit from improved trading in both Power Systems and Civil Aerospace. In Civil Aerospace we delivered on key drivers of future cash flow with further improvement in average OE unit losses and continued aftermarket growth. Defence grew both revenue and profit and enjoyed substantial order intake. In Power Systems we also saw good revenue growth and order intake and entered the second half underpinned by a healthy backlog.
“We have made good progress on resolving the Trent 1000 compressor issue, though regretfully, customer disruption remains. Progress on our restructuring programme is in line with the plan we outlined a year ago. We took significant strides in accelerating our electrification ambitions through the announced acquisition of Siemens’ eAircraft business in our drive to create cleaner, more sustainable and scalable power for the future.”
The firm said it was on course with its full-year guidance for underlying profit.
