Rolls Royce reiterates full-year guidance for sales and cash
Engine manufacturer Rolls Royce stuck to its current full-year 2015 guidance and chose to emphasise the positive outlook for the year thanks to continued growth in its order book.
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Management however was still smarting after it was forced to downgrade its guidance for free cash-flow generation on 6 July.
In updated guidance provided to investors at the start of the month the company said it now expected free cash-flow for all of 2015 to be between -£150m and £150m, instead of the previous range of £50m to £350m. As a result, it chose to discontinue its share buy-back programme, sending its shares into a nosedive.
On that occassion, the company also trimmed its guidance for underlying profit before tax to between £1.33bn to £1.475bn, compared to previous guidance of £1.4bn to £1.6bn, reflecting the deterioration in its offshore division.
For the six months ended on 30 June Rolls Royce said sales were 3% lower to reach £6.3bn but profits before tax dropped 32% to £439m, both on an underlying basis.
Warren East, Chief Executive, said in a statement: "Despite the disappointment of our recent update, our second half outlook remains positive and full-year guidance for revenue, profit and cash issued on July 6th remains unchanged. The continued growth in our order book demonstrates the long-term demand for our innovative products and services, and underpins my confidence in the fundamental strength of our business."