Rolls-Royce update reassures

Engines giant Rolls-Royce reassured investors today by revealing it had secured £5bn (€6.32bn) of new orders since the end of June.

While unwilling to forecast the likely effect of the economic downturn on its markets, Rolls described trading activity at its four businesses as good and said that current trading remained in line with City expectations.

Shares rose almost 10% after the brief update, which Numis Securities described as reassuring. The broker left its full-year profits forecast of £801m (€1,012m) untouched, a figure representing 12% growth on a year earlier.

Rolls, which has major plants at Bristol and Derby, said earlier this year that a buoyant oil and gas industry had boosted its marine and energy businesses, with defence work also strong.

And Numis said an order backlog of close to £60bn (€75bn) gave the company “very high visibility”.

Analyst Andrew Gollan added: “We see limited cancellation risk as the airline sector continues to replace old inefficient fleets with new aircraft.”