Rolls-Royce on track as overhaul plans 'move at pace'

Aero-engine maker Rolls-Royce has said its financial performance is “improving” as it pushes forward with its sweeping overhaul.

The engineering giant said trading has been in line with expectations over the four months to April as it continues to benefit from growth in its key markets. The group cut thousands of jobs following the heavy impact of the pandemic and launched a transformation programme to reduce costs and create efficiencies in a bid to improve profits. Rolls-Royce, which has a plant in Inchinnan, told shareholders ahead of its annual general meeting that the strategy is “moving at pace”. It came as the group held firm on its profit guidance for 2023.

The company said it has seen a continued improvement in flying hours by engines from its civil aerospace operation, reaching 83 per cent of 2019 levels over the first four months of 2023, in line with expectations. Chief executive Tufan Erginbilgic said: “We are transforming Rolls-Royce into a high quality and competitive business with a strong balance sheet and growing profit, cash flows and returns. We are already benefiting from the actions we are taking as well as recovery and growth in our end markets.”

Michael Hewson, chief market analyst at CMC Markets UK, said: “One of the standout performers [in the] year to date, the Rolls-Royce share price has surged over 60 per cent since the start of the year, with most of the gains coming since February when the company reported its full-year results and raised their profit guidance for the year. Everything that we’ve seen in [this] trading update appears to suggest that the company [is] ahead of schedule.”