Rolls-Royce shares plunge on profit warning
LONDON (AFP) - Profit and revenue will flatten for Rolls-Royce this year, the engine maker warned on Thursday, as government cutbacks on defence spending ends the company's decade of rampant growth.
The announcement, alongside news of a 41-per cent slump in annual profits, sent Rolls-Royce shares diving 15.15 per cent to 1,027 pence on London's benchmark FTSE 100 index, which was down by 0.52 per cent heading into the close.
"For the full year 2014, we expect underlying group revenue and profit to be flat," Rolls said in an earnings statement.
"This reflects a 15-20-per cent decline in defence revenue, the consequence of well-publicised cuts in defence spending among major customers, and completion of the delivery phase of two major export programmes." Chief executive John Rishton said 2014 would represent "a pause... not a change in direction, and growth will resume in 2015".