Rolls-Royce has confirmed it is to continue its Brexit contingency plans following the Prime Minister’s decision to delay the vote on her deal in Parliament. The manufacturing giant also revealed its profits and cash flow for 2018 is expected to be in the upper half of its guidance range.
The listed company, which is headquartered in Derby, added that it expects to complete about 500 large engines in total this year, lower than its projection in March of about 550 units.
Rolls-Royce said the reduction reflects supply chain “challenges that are affecting the whole civil engine sector and also early stage production ramp-up challenges” on its new Trent 7000 engine.
However, the business added that it is “confident” that Trent 7000 production and delivery volumes will “increase significantly” in 2019.
In its power systems division, the company has reported “strong growth” in the second half of 2018 while trading progress in defence remained in line with its full-year guidance, with revenues expected to remain stable.
A statement to the London Stock Exchange said: “Rolls-Royce notes the decision by the UK government to delay the vote on the proposed withdrawal agreement and political declaration.
“We will continue to implement our contingency plans until we are certain that a deal and transition period has been agreed.
“Specifically, we are working with EASA to transfer design approval for large aero engines to Germany, where we already carry out this process for business jets.
“This is a precautionary and reversible technical action which we do not anticipate will lead to the transfer of any jobs.
“We have begun to build inventory as a contingency measure, in line with the timetable that we gave in the summer.
“We have been liaising with all our suppliers and have reviewed our logistics options and have the required capacity available.
“At this point we have contingency plans in place and will update the market when we have clearer visibility.”