Rolls-Royce predicts £400m Brexit boost to revenues

Rolls-Royce said overseas sales in dollars would gain from the Brexit-battered pound. Picture: Sean Gallup/Getty Images
Rolls-Royce said overseas sales in dollars would gain from the Brexit-battered pound. Picture: Sean Gallup/Getty Images
Share this article
0
Have your say

Rolls-Royce has said the collapse in sterling will give it a £400 million boost to revenues and a £50m lift in profits.

The aircraft engines giant said in a trading update that it will benefit from overseas dollar sales once they are translated back into the Brexit-battered British currency.

• READ MORE: Sterling surges as BoE moves closer to rates hike

“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 full-year reported revenues by around £400 million and improve reported profit before tax by around £50m,” the company said.

200 Voices: find out more about the people who have shaped Scotland

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

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

• READ MORE: Rolls-Royce agrees £671m settlement for corruption claims

But Rolls said 2017 has started well, with all businesses performing in line with expectations. Its estimates for first-half revenue, profit and free cash flow remain unchanged.

Chief executive Warren East said: “2017 has started well, although we have a great deal more to do to deliver the full year. As expected, near-term cash 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 former boss of chips developer Arm Holdings, the group is on track to make annual savings of about £200m by the end of the year.

Click here to ‘Like’ The Scotsman Business on Facebook