Rolls happy with record order book, despite job losses
Engineering and aerospace giant Rolls-Royce says its record order book and “robust“ balance sheet have left it confident of weathering the economic storm.
The group posted a 10% rise in underlying pre-tax profits to £880m for 2008, at the top end of market expectations.
It also said its order book had growth 21% to a record £55.5bn - although it warned the economic headwinds would stall profit growth this year.
But the firm was bullish about its long term prospects, and forecasted the capability to double its revenues though organic growth in the next decade.
The firm is also paring back on costs this year after it announced plans to cut up to 2,000 staff last November.
Rolls-Royce said its sales increased 22% over the year to £9bn.
But it has seen some weakening demand towards the end of the year and warned the “unprecedented“ economic gloom would have an impact on the company, its suppliers and customers.
Rolls-Royce said its resilience in dealing with other crises such as the 9/11 terror attacks and the Gulf War would help it cope with the tougher environment.
Analysts responded well to the results, although shares fell just over 1% today.
Hargreaves Lansdown analyst Keith Bowman said: “These are undoubtedly positive results, although uncertainty surrounding prospects for the global economy will continue to pressurise the share price.
“In essence, Rolls Royce remains a rarity in the British landscape - a successful home grown manufacturing company.”
