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Rolls-Royce shares soar after £200 million cost savings pledge

Published 28/07/2016

Warren East pledged up to £200 million in cost savings by 2017
Warren East pledged up to £200 million in cost savings by 2017

Shares in Rolls-Royce soared on Thursday after boss Warren East pledged up to £200 million in cost savings by 2017 and swung the axe on 400 top jobs at the engine maker.

The staff cuts are double the 200 previously planned for 2016 and come as Rolls reported an 80% slump in interim profits to £104 million in the first half of the year.

The company's stock was up 15% in afternoon trading as the firm also forecast a profits recovery in the second half.

Mr East, who is embarking on a turnaround plan at the aerospace giant, said: "We have taken some positive first steps on the journey that will lead Rolls-Royce to profitable and highly cash-generative growth.

"In the first six months, we have made progress with our business transformation; introducing the greater pace and simplicity required to make Rolls-Royce a more resilient company."

The company has struggled amid a falling order book but on Thursday said the first six months of 2016 have seen a return to form.

Orders have rocketed from £3.1 billion to £79.5 billion since the turn of the year as Rolls has inked new deals with the likes of Virgin Atlantic, Norwegian and Gulf Air.

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