Business

Rolls-Royce’s progress powers share price rise

Carmaker to continue with cost-cutting strategy, adopted as part of the turnaround

Rolls-Royce had recorded a record loss for 2016. Photograph: Rolls Royce/PA Wire

Wed Mar 7 2018 - 18:20

Rolls-Royce said it was on track to meet its 2020 goals after beating forecasts last year, providing evidence that chief executive Warren East’s plan to rebuild one of the biggest names in British manufacturing was paying off.

Shares in aero-engine maker Rolls gained 13 per cent to 939 pence on Wednesday, their highest level since November, after its 2017 pretax profit rose 25 per cent to £1.071 billion, beating a consensus forecast of £878 million.

Rolls had recorded a record loss for 2016.

More simplification

Rolls said it would continue with a cost-cutting strategy, adopted as part of the turnaround. “The reality is there is more simplification that we need to do to make ourselves truly competitive and fit for the future,” Mr East said.

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The strong performance in 2017 was driven by a jump in engine deliveries and higher maintenance volumes. Rolls also reported rising sales in its power systems business, which makes engines for use in trains, agriculture and mining.

“We’re seeing this as an encouraging set of results,” Mr East said.

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