Rolls-Royce performing 'well' as it heads to Paris Airshow

Rolls-Royce Holdings issued a pre-close trading update on Friday, as it prepared to meet investors over the next fortnight at the Paris Airshow - and ahead of its half year results on 1 August - claiming it had started the year “well”, with all businesses performing in line with expectations.

The FTSE 100 company said that as a result, group expectations for first half revenue, profit and free cash flow remained unchanged from that provided at its annual general meeting in May.

Looking at the year as a whole, the board described “mixed” market conditions, but said it remained focussed on the delivery of its engine production ramp up, the continued execution of its transformation programme and growing its free cash flow.

Full year expectations for revenue, profit and free cash flow were unchanged from those outlined in February.

The company’s 2017 outlook excluded the year-on-year effect of foreign exchange translation on its reported results, the board added.

Its guidance at this stage of the year was unchanged, and if rates remained unchanged from those seen recently, the impact of the average year-on-year movement on the translation of its overseas subsidiaries results would improve full-year reported revenues by around £400m and improve reported profit before tax by around £50m.

“2017 has started well, although we have a great deal more to do to deliver the full year,” said chief executive Warren East.

“As expected, near term cash flow performance remains challenging as we continue to invest in transforming and growing the business to benefit future years.”

East said news updates around events such as the Paris Airshow were increasingly expected to reflect Rolls-Royce’s transition from a period of “above-trend order book growth” to one of “operational delivery”.

“Our ramp up in large engine production is progressing well, reflecting the significant investments in manufacturing capability in recent years.

“Across the wider group, all our businesses continue to focus on transformation activities and are benefiting from our increased focus on pace and simplicity.”