Feb 14, 2017
Scandal-struck Rolls-Royce crashes to £5bn record loss
Rolls-Royce today attempted to draw a "line in the sand" after huge fines over a bribery probe and the weak pound sent it hurtling to one of the largest losses in corporate history.
The struggling aerospace giant said a Serious Fraud Office settlement and a multi-billion-pound hit on foreign exchange derivatives led it to a £4.6 billion paper loss last year, the largest in its 133-year history. Chief executive Warren East insisted the company was turning a corner after putting its legal woes behind it, signalling a further shake-up of the once-bloated company.
"As far as the SFO is concerned, that is it. We have provided completely open access to the SFO so this is drawing a line in the sand as far as that is concerned," he said.
"The transformation is starting to deliver and it's a good time to look forward and turn our focus to long-term goals."
The FTSE 100 giant showed tentative signs of recovery with better-than-expected free cashflow of £100 million and improving production of its new Trent jet engines. But investors were cautious after the company warned progress in 2017 would be "modest," sending the shares down 5.5%, or 41p, to 699p. East, who has laid off swathes of Rolls' management since taking over in July 2015, said he was considering what the company has to do "to win over the next 15 to 20 years" amid a sea-change in the aerospace and engineering industry.