Shares in Rolls-Royce slumped as much as 10 per cent after the engine-maker issued is second profit alert in just six months and cancelled its share buyback programme.
The company, which has major Scottish bases in East Kilbride and Inchinnan, blamed deteriorating oil and gas markets and reduced demand for some engines as it cut its full-year profit guidance to as low as £1.33 billion, down from earlier forecasts of £1.4bn to £1.55bn.
“We now expect the impact of reduced Trent 700 deliveries to be greater than initial estimates,” Roll said, referring to its engines found in 58 per cent of Airbus A330 planes.
The alert came just days after new chief executive Warren East, the former boss of chip designer Arm Holdings, replaced John Rishton at the helm of the group, which employs more than 54,000 people.
East said he was “clearly disappointed” by the latest in a string of profit warnings, “and the impact this will have on our investors and employees”.
Mike van Dulken, head of research at Accendo Markets, said: “The outlook for demand and pricing for Trent 700 engines and reduced demand for private jet engines is seen denting results for the next three years and the company’s first-ever share buyback programme has already been abandoned after just a year and having achieved only half its £1bn goal.”