Rolls-Royce spends £100m on no-deal Brexit planning
Aero-engine group announces further charge on troubled Trent 1000 programme
Warren East, chief executive, said the FTSE 100 group had spent the extra funds building up inventory and arranging logistics in case of disruption if the UK crashes out of the EU at the end of October without an agreement. Photograph: Newscast/Rolls-Royce /PA Wire
Rolls-Royce has revealed it has spent £100 million (€109 million) preparing for a no-deal Brexit as the aero-engine group announced a further charge on its troubled Trent 1000 programme.
Warren East, chief executive, said the FTSE 100 group had spent the extra funds building up inventory and arranging logistics in case of disruption if the UK crashes out of the EU at the end of October without an agreement.
He said “we are as well prepared we can possibly be”, adding that the company had been “consistent for a long time that a deal is better than no deal”.
Rolls-Royce reported an extra charge of £100 million (€109 million) over the next three years to cover additional costs on its Trent 1000 engine programme, which powers Boeing’s 787 Dreamliner, on top of the £1.5 billion (€1.6 billion) already earmarked.
Mr East said the Trent 1000 was still “causing a number of our customers significant disruption”. The company has had to embark on an extensive programme of repairs and redesign some parts after turbine blades on some variants of the engine corroded faster than expected.
Sandy Morris, analyst at Jefferies, said the extra charge related to the programme was “unfortunate”, advising that “until the Trent 1000 is tamed, some caution is required”.
Rolls-Royce’s share price fell 3 per cent to 790p on Tuesday even as the group posted a 7 per cent rise in reported revenues to £7.35billion (€7.9 billion) in the first six months. – Copyright The Financial Times Limited 2019