British engineering company Rolls-Royce confirmed its commitment to the UK in the wake of the country’s vote to leave the EU, as it said it was comfortable with its outlook for the year.
Rolls-Royce, in the middle of a turnaround plan to reverse an expected halving of its profit in 2016, said on Tuesday that its cost-cutting plan was on track and it continued to expect a stronger profit performance in the second half of the year.
The company said that Britain’s decision to quit the EU would have no immediate impact on its day-to-day business, but the medium and long-term impact would depend on the relationships struck by Britain with the EU and elsewhere.
The Brexit vote has sent shockwaves through British companies, hammering shares in airlines, housebuilders and banks, and threatening at least two years of uncertainty as the country renegotiates trading relationships.
Rolls-Royce had written to employees before the vote to tell them the company would be better off in the EU.
“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 in its statement on Tuesday.
Not all of Britain's blue chip companies have been prepared to state their commitment to the UK. Vodafone said on Friday it was too soon to form a view on where the UK-based company would be domiciled after Britain voted to leave the European Union.
For this year, Rolls-Royce said its profit forecast, which excludes the year-on-year effect of foreign exchange translation, was unchanged. Analysts expect Rolls-Royce’s 2016 pretax profit to slump to £633 million pounds (€761 million), according to Thomson Reuters data, from £1.36 billion in 2015.
The company had warned in May that it expected to report a result close to breakeven for the first half of the year, before profit rises in the second six months from increased large engine deliveries, higher demand for servicing engines and cost-cutting benefits.
The company will report its first-half results on July 28th and give an update on its cost-saving plan.
Reuters
