Business

Engine troubles weight on Rolls-Royce despite 'good end' to 2019

File photo dated 11/04/13 of a general view of the Rolls Royce logo as the engines giant has said revenues and profits will fail to grow this year as it counts the cost of defence spending cuts among major customers. PRESS ASSOCIATION Photo. Issue date: Thursday February 13, 2014. See PA story CITY Rolls. Photo credit should read: Rui Vieira/PA Wire.
File photo dated 11/04/13 of a general view of the Rolls Royce logo as the engines giant has said revenues and profits will fail to grow this year as it counts the cost of defence spending cuts among major customers. PRESS ASSOCIATION Photo. Issue date: T File photo dated 11/04/13 of a general view of the Rolls Royce logo as the engines giant has said revenues and profits will fail to grow this year as it counts the cost of defence spending cuts among major customers. PRESS ASSOCIATION Photo. Issue date: Thursday February 13, 2014. See PA story CITY Rolls. Photo credit should read: Rui Vieira/PA Wire.

ROLLS-ROYCE has posted an £852m loss as persistent problems with its Trent 1000 engine overshadowed record engine deliveries.

The company saw shares push higher in early trading after it posted the loss, which narrowed by 27 per cent from its £1.16bn loss in 2018.

Rolls-Royce said it was impacted by £578m related to the engine problems, as well as a £1.4bn exceptional charge.

However, the firm saw underlying profits jump 25 per cent to £808m as it was buoyed by a stronger second half period.

Warren East, chief executive of the business, said it had a "good end" to the year "after a challenging first half" and saw its restructuring efforts gain momentum.

The manufacturer said it delivered £269m of cost-savings during the year.

Looking forward, the company said the outbreak of coronavirus is "likely to have an impact" on air traffic growth in the near term.

Mr East added: "The situation is still evolving, and as such our guidance for 2020 excludes any material impact.

"We are monitoring developments, taking mitigating actions, and will update the market as appropriate."

Julie Palmer, partner at Begbies Traynor, said: "It's been a turbulent year for Rolls-Royce, with issues surrounding its Trent 1000 engine, supplier payments and the pace of its turnaround programme.

"Design glitches on the Trent 1000 engine has meantms has been put aside for repairs, causing a number of Boeing's popular 787 Dreamliners to be grounded, damaging the longstanding relationship between the companies and losing major contracts.

"The firm's woes are also being felt further down the line with a failure to pay suppliers on time leading to the removal of the company from the prompt payment code - a significant dent to its reputation as the one time darling of British engineering."

In a separate announcement, Rolls-Royce said Dame Angela Strank, who is currently chief scientist and head of downstream technology at BP, will join the company as a non-executive director from May.