Rolls-Royce strikes positive tone in trading update

Rolls-Royce has said that it is seeing positive signs of recovery as it continues to bounce back from the impact of the Covid pandemic.

In a recent trading update, the engineering giant, which has its Civil Aerospace and Defence divisions in Derby, said that it was seeing a gradual recovery in large engine flying hours.

It said it was starting to feel the benefits of the cost reduction and restructuring plans it has implemented, which have delivered savings of over £1 billion.

The firm has also sold off some of its businesses, raising proceeds of around £2 billion.

And it is making good progress in new markets, including the launch of Rolls-Royce SMR – a new business making small nuclear power stations.

The firm was hit hard by the pandemic last year, particularly its civil aerospace business.

But this year, it has seen a gradual recovery as jets powered by its engines return to the skies.

Chief Executive Warren East said: “We are delivering on the elements within our control and are focused on our commitments.

“We have achieved good results with our fundamental restructuring programme, as we sustainably reduce costs and deliver a leaner and more efficient company and are firmly on course to complete our disposals programme.

“While external uncertainties clearly remain, we have seen continued gradual recovery in our Civil Aerospace business, a growing order book in Power Systems and have secured a significant contract win in Defence.

“We are investing in the net zero technologies and solutions that we need across the group to grasp the tremendous commercial opportunity of the global energy transition and drive long-term value.

“This all underpins our strategy of creating a better quality and more balanced business which can deliver significantly improved returns and cash flow into the future.”

The firm said it will publish its full-year results on 24 February.