Falling pound to help profit and sales soar at Rolls-royce

Firm expecting £400m sales boost and £50m to profit Follows 2016’s £4.6bn pre-tax loss hit by writedowns

Aircraft engine maker Rollsroyce has said the collapse in sterling will give it a £400 million boost to revenues and a £50m rise in profits.

The business said in a trading update yesterday that it will benefit from overseas dollar sales once they are translated back into the Brexitbattered British currency.

“If rates remain unchanged from those seen recently, the impact of the average year-onyear movement on the translation of our overseas subsidiaries results would improve full-year reported revenues by around £400m and improve reported profit before tax by around £50m,” the firm said.

The pound has plummeted since the Brexit vote against the dollar and euro, boosting British exporters and hurting importers.

It comes after dire Rollsroyce results for 2016, which showed it plunging into the red with pre-tax losses of £4.64 billion after being hit by a £4.4bn writedown, as well as a £671m penalty to settle bribery allegations.

But Rolls said 2017 has startedwell,withallbusinesses performing in line with expectations. Its estimates for firsthalf revenue, profit and free cash flow remain unchanged.

Chief executive Warren East said this year got off to a good start, “although we have a great deal more to do to deliver the full year.

“Asexpected,near-termcash flow performance remains challenging as we continue to invest in transforming and growing the business to benefit future years.

“News updates around events such as the Paris Air Show are increasingly expected to reflect our transition from a period of above-trend order book growth to one of operational delivery.

“Our ramp-up in large engine production is progressing well, reflecting the significant investments in manufacturing capability in recent years.”

Under East, the group is on track to make annual savings of around £200m by the end of the year.

The company said in a separate statement that it had appointed Beverly Goulet as a non-executive director. She will join the board early next month and has most recently been serving as a senior executive with American Airlines Group, and is set to retire from this role at the end of June.

Goulet said: “This is an exciting time for the group and I am looking forward to working with the team to ensure Rolls-royce continues to develop and strengthen its businesses for the benefit of all stakeholders.”