Rolls-Royce set to scoop £400m from fall in pound
AIRPLANE engine maker Rolls-Royce says it could be in line for a £400m windfall due to the fall in the pound.
Many of its clients are overseas so it gets a boost when translating earnings back to a weakened sterling.
Yesterday the firm said: ‘ If rates remain unchanged from those seen recently, the impact of the average year- on-year movement on the translation of our overseas subsidiaries results would improve fullyear reported revenues by around £400m and improve reported profit before tax by around £50m.’
It follows a dire stretch for the company after a record £4.6bn annual loss for 2016, with underlying profits also falling 40pc. It was also fined £671m to settle overseas bribery allegations. Chief executive Warren East said 2017 had started well but cash flow was a challenge.
Rolls said it had a record £71bn order book. Ahead of next week’s industry event, the Paris Air Show, East said there would be fewer announcements about new orders, with a focus on work being completed.
He added: ‘ Our ramp-up in large engine production is progressing well. Across the wider group, all our businesses continue to focus on transformation activities and are benefiting from our increased focus on pace and simplicity.’
Since taking charge in 2015, East, 55, has stripped out management and ramped up production, and has plans to save around £200m a year.