Belfast Telegraph

Rolls-Royce boosts cost savings under group-wide overhaul

Engine maker Rolls-Royce has said it is ramping up cost savings under its group-wide overhaul.

The group is set to deliver savings at the top end of its target to slash costs by between £150 million to £200 million.

It said the market outlook remained mixed, with demand strong for its engines for extra wide body civil aircraft, but further weakening in business aviation and continuing woes in offshore oil and gas markets for marine, where its order book remains "very weak".

Chief executive Warren East said: "We have made steady progress in 2016 to date, delivering a ramp up in large engine production and implementing the first stage of our transformation programme.

"At the same time we have managed well mixed markets for our marine and power systems businesses."

Mr East is embarking on a turnaround plan at the aerospace giant, which has been forced to cut its dividend amid falling profits.

Mr East said that, with the first phase of his restructuring plan completed, "it is now time to look further ahead".

"Together with my new team, our focus is turning towards the group's long-term goals," he added.

The group kept its outlook for a decline in revenues and profits this year unchanged.

But it said the boost from the plunging pound and cost savings would "more than offset" the higher engineering and programme costs in its civil aerospace arm.

Mr East recently announced the appointment of a new finance chief as part of an ongoing top management shake-up.

Stephen Daintith has been drafted in to replace chief financial officer David Smith, who will leave the business next year.

The move, announced in September, came soon after it said Simon Kirby, currently at HS2, will join the firm as chief operating officer.

In July, Mr East swung the axe on 400 top jobs at the engine maker.