Rolls-Royce extends engine tests but maintains guidance

Rolls-Royce said on Monday that it has identified a durability issue with some Trent 1000 'Package B' engines that are used by Boeing.

As a result, the company has agreed with Boeing and the relevant regulators to carry out tests on an additional 166 engines that have been in service since 2012 to get a better understanding of the situation. Despite the extra costs, however, the aerospace and defence giant stuck by its guidance.

"While the consequences of the additional inspection requirements for Package B engines will incur some additional cost, this together with our latest understanding of the Package C service impact forecast and the mitigating actions we continue to take across the group, enable us to be confident that our FY18 guidance for group free cash flow of around £450m +/- £100m remains unchanged."

According to weekend press reports, Rolls-Royce is due to announce the axing of more than 4,000 jobs this week as it looks to cut costs and improve profitability.