New boss at troubled Rolls-Royce pledges to ‘sharpen focus’ after profits tumble
Rolls-Royce’s new boss Warren East has vowed to lick the ailing engineering giant into shape after its first-half profits tumbled by 57%.
The FTSE 100 giant has had a woeful 18 months, characterised by a string of profit warnings, job cuts and management changes that included East replacing John Rishton as chief executive this month.
Pre-tax profits fell from £713 million to £310 million during the six months ending June 30 with lower engine demand and weak oil prices hitting the company.
Rolls-Royce has already cut its full-year forecasts for 2015 and warned of further headwinds in 2016.
“Despite the disappointment of our recent update, our second-half outlook remains positive,” East said as Rolls’s order book swelled £2.8 billion to £76.5 billion.
“The initial phase of my ongoing operational review has and will continue to concentrate on how we drive improvements and sharpen our focus to make us a more resilient and sustainable business.”
Defence giant BAE also saw its pre-tax profits fall in the first half of the year, from £541 million in 2014 to £508 million.
Roger Johnston, analyst at Edison Investment Research, said: “BAE has managed to maintain a flat performance.”
