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Rolls-Royce reaffirms UK commitment but seeks long-term post-Brexit assurances

Published 28/06/2016

Rolls-Royce is seeking long-term reassurances from the UK's Brexit deal
Rolls-Royce is seeking long-term reassurances from the UK's Brexit deal

Rolls-Royce has reaffirmed its commitment to the UK in the wake of the country's decision to exit the European Union, but warned that longer term assurances would depend on a post-Brexit deal.

The jet and engine maker said that the result was "not the outcome the company would have chosen", but added that it "remains committed" to Britain, where it employs 23,000 people.

Rolls-Royce said: "Although this is not the outcome the company would have chosen, Rolls-Royce remains committed to the United Kingdom where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority of our research and development.

"The UK's decision will have no immediate impact on our day-to-day business. The medium and long-term effect will depend upon the relationships that are established between the UK, the EU and the rest of the world over the coming years.

The firm also said that its outlook for the year ahead is unchanged and that currency movements would boost underlying revenues by around £400 million and improve underlying profit before tax by around £40 million.

In May, Rolls-Royce boss Warren East told investors at the firm's AGM that its turnaround was on track. Mr East told shareholders that "good progress" had been made on his plan to return the group to health after warning over profits five times in two years.

It is set for improved trading in the second half thanks to large engine deliveries, growth in after-market revenues and benefits from a swingeing cost-cutting programme.

Rolls recently gave US activist shareholder ValueAct a seat on its board in a move that will give the investor influence over the engine maker as its seeks to turn around its fortunes. Bradley Singer - a partner and chief operating officer at San Francisco-based fund ValueAct - was appointed as a member of the science and technology committee.

It revealed in February that annual profits tumbled by 12% to £1.4 billion in 2015, but this was less than feared as the firm's cost-cutting began to take effect.

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