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Rolls-Royce cuts dividend by 50% after torrid year Rolls-Royce cuts dividend by 50% after torrid year
(35 minutes later)
Aero-engine giant Rolls-Royce has cut its dividend by 50% after a torrid year.Aero-engine giant Rolls-Royce has cut its dividend by 50% after a torrid year.
The company, which has issued a string of profit warnings over the year, also announced profits in line with the guidance it gave last year, albeit at the lower end of the range it outlined. The company, which has issued a string of profit warnings in recent years, also announced profits in line with the guidance it gave last year, albeit at the lower end of the range it outlined.
Rolls-Royce made £1,355m before one-off items. Rolls made £1.35m before one-off items.
The chief executive said it had been a year of considerable change for the company. The chief executive said it had been a year of considerable change and that there would be further cost cuts on top of the £200m savings already planned.
The company said that it had made roughly 50% of those savings.
Rolls-Royce employs more than 21,000 people in the UK, with more than 12,000 employed at its Derby aerospace engines and submarines division.Rolls-Royce employs more than 21,000 people in the UK, with more than 12,000 employed at its Derby aerospace engines and submarines division.
Last year, the company announced 3,600 job cuts and warned that some of its 2,000 senior managers would depart.Last year, the company announced 3,600 job cuts and warned that some of its 2,000 senior managers would depart.
Rolls also said it had cut the two top layers of management by 20% and planned further cuts.
It added that the initial exceptional restructuring charge for these changes would be £75m-100m this year.
'Challenging'
As well as its world-famous plane engines, the company also makes engines for the UK nuclear submarine fleet.As well as its world-famous plane engines, the company also makes engines for the UK nuclear submarine fleet.
Its recent troubles have alarmed the government to the extent that the Business Minister, Anna Soubry, said in December that the government was "monitoring the situation carefully".Its recent troubles have alarmed the government to the extent that the Business Minister, Anna Soubry, said in December that the government was "monitoring the situation carefully".
The next generation of nuclear submarines, due to be deployed by 2030, is being planned by the government.The next generation of nuclear submarines, due to be deployed by 2030, is being planned by the government.
It is putting in place a series of management changes, in the wake of repeated warnings of lower profits and a restructuring designed to save up to £200m a year from 2017.
Chief executive Warren East, who joined the company in July, has said an "accounting fog" had developed that had left investors unclear about its direction.Chief executive Warren East, who joined the company in July, has said an "accounting fog" had developed that had left investors unclear about its direction.
He is restructuring the company, which will operate as five businesses, with the presidents of civil aerospace, defence aerospace, marine, nuclear and power systems reporting to Mr East.
Mr East said: "In the context of challenging trading conditions, our overall performance for the year was in line with the expectations we set out in July 2015.Mr East said: "In the context of challenging trading conditions, our overall performance for the year was in line with the expectations we set out in July 2015.
"It was a year of considerable change for Rolls-Royce: in our management, in some market conditions and in our near-term outlook.""It was a year of considerable change for Rolls-Royce: in our management, in some market conditions and in our near-term outlook."
He added that there were some positive notes, including the underlying growth of long-term markets and a growing order book.He added that there were some positive notes, including the underlying growth of long-term markets and a growing order book.
To add to the company's problems, it is the subject of an investigation by the Serious Fraud Office.
Rolls said it was continuing to co-operate with the authorities in the UK, the US and elsewhere, but was unable to give any further details or a timescale for when the investigation would end.