Rolls-Royce sticks to forecast as no Brexit ballot effect seen

Bloomberg

Rolls-Royce Holdings Plc, the U.K.’s biggest manufacturer, said business this year is in line with expectations and reiterated that the country’s vote to leave the European Union will have no immediate effect on the company, offering investors a rare bit of good news after days of turmoil in the markets.
Underlying profit before financing charges and tax is expected to be close to break-even in the first half, the London-based maker of jet engines said in a statement Tuesday, reiterating a forecast from May. The forecast for the full year is unchanged, and business will pick up in the second half with increased deliveries of large engines, it said.
The manufacturer told staff earlier this month that a referendum decision for Britain to exit the EU, known as Brexit, would limit the company’s ability to plan and be “ unsettling” for business. The outlook on Tuesday is all the more reassuring because Rolls-Royce has struggled in recent years, warning investors six times of disappointing profits amid weak demand at the unit that makes marine engines and slowing business-jet sales.
Talks on the terms for the U.K.’s withdrawal from the EU have yet to be set. U.K. Prime Minister David Cameron, who will meet other leaders from the bloc later Tuesday, said when announcing his resignation on Friday that his successor will be the one to trigger the departure process.
The medium- and long-term effect of the vote last week “will depend upon the relationships that are established between the U.K., the EU and the rest of the world over the coming years,” Rolls-Royce said on Tuesday.
“Although this is not the outcome the company would have chosen, Rolls-Royce remains committed to the United Kingdom where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority of our research and development,” the company said.