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Rolls-Royce shares jump on outlook, bribery settlement

Tuesday, January 17, 2017 - 01:10

Shares in Rolls-Royce climbed 6 percent after the British aero-engine maker settled a long-running bribery probe and says that 2016 profit will beat expectations. David Pollard reports.

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Power on for Rolls-Royce as it settles a long-running bribery probe .... Shares jumped six per cent on a better profit outlook - and after the engine-maker said it would pay 671 million pounds to UK, US and Brazilian authorities. The payment - related to allegations of corruption by overseas intermediaries - will be spread over five years. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "The bad news, of course, was that the sum was greater than had been expected, but the good news that the uncertainty is cleared is definitely a plus point." Eighteen months of cost-cutting under chief exec Warren East now also seen as a plus. Rolls telling investors it had finished the year strongly. Profit and cash flow, it says, will be ahead of expectations. (SOUNDBITE) (English) CHIEF INVESTMENT OFFICER, CCLA INVESTMENT MANAGEMENT, JAMES BEVAN, SAYING: "We get the full news on the 14th of February, but the market is pleased because this is the first time for a very long time that Rolls has been able to come to the table and say 'Guys, actually if anything you're too conservative." A Brexit-weakened pound may be boosting Rolls' exports. The engine maker restructuring while also hiking output of wide-body plane engines. A challenge that East himself has acknowledged as huge.

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Rolls-Royce shares jump on outlook, bribery settlement

Tuesday, January 17, 2017 - 01:10