After it issued its fourth profit warning in less than 18 months, Rolls-Royce said today that its order book had roared - despite revenue and profits before tax falling.
Rolls-Royce said underlying revenue had fallen three per cent to £6.3bn in the first half of the year, compared with £6.5bn last year. The company said there had been lower than expected demand in its core civil aerospace division - which makes jets for airplanes.
Underlying profit before tax fell 32 per cent to £439m. while earnings per share dropped to 19.51p, from 28.85p in 2014.
It wasn't all bad news, though: the company hiked its dividend by three per cent to 9.27p per share.
And the company said its order book had increased by £2.8bn to £76.5bn.
Investors were cautious: shares were up 1.2 per cent at 739p in early trading.
Why it’s interesting
The results will look disappointing for a company which has had a hard time of late: earlier this month, it issued another profit warning a few days after new chief executive Warren East started his job, lowering profit expectations for its marine division by £85m, and suspending its £1bn share buyback programme.
The company has experienced lower than expected demand for some products, including the Trent 700 engine, used which the company blames its difficulties on.
However, the firm continues to attract orders, and investors will be lifted by increases in the order book.
What Rolls-Royce said
Despite the disappointment of our recent update, our second half outlook remains positive and full-year guidance for revenue, profit and cash issued on 6 July remains unchanged. The continued growth in our order book demonstrates the long-term demand for our innovative products and services, and underpins my confidence in the fundamental strength of our business.
In the near term, we are managing a significant transition from mature engines to newer, more fuel efficient ones, such as the Trent XWB, Trent 7000 and Trent 1000. At the same time, we are taking appropriate actions to mitigate the effects of weakness in our offshore marine markets.
While revenues and profit at Rolls-Royce continue to fall, there are hopes the company will weather the storm.