Rolls-royce dampens its Paris Air Show sales expectations

ROLLS-ROYCE has signalled that investors should expect few orders at next week’s Paris Air Show, issuing a downbeat trading statement.

The FTSE 100 engineer said the year had started well, with trading conditions in line with forecasts, and Warren East, the chief executive, predicted that 2017 would be a year of “modest growth” in sales and profit.

Last year the firm had revenues of £15bn but reported a record pre-tax loss of £4.4bn because of accounting rules related to the company’s foreign exchange contracts.

On an underlying basis, it suffered a 43pc drop in pre-tax profits to £813m and positive free cash flow of £100m. This measure means the firm has money remaining after essential spending and is seen as a crucial indicator of the company’s performance by Mr East.

However, he warned investors not to expect the bumper orders that previous Paris Air Shows have produced, saying the company was now focused on working its way through its massive order book for civil aircraft, which stands at £71.4bn.

Rolls also announced Beverly Goulet, the American Airlines executive, will join its board on July 3 as a nonexecutive director.

Its shares closed up 12.5p, or 1.4pc, at 907.5p yesterday.