Rolls-Royce chief exec assures shareholders it’s all going to be ok
The chief executive of Rolls-Royce has sought to reassure shareholders everything is going to be OK ahead of the company's AGM today.
At the meeting in Nottingham, chief executive Warren East will aim to lift investors' spirits by confirming trading over the past few months has been in-line with expectations and the year's overall outlook remains largely unchanged.
However, the year will not be totally bump-free, as East will also say: "Despite steady market conditions for most of our businesses, 2016 continues to be a challenging year overall as we sustain investment and start to transition major products in civil aerospace, and tackle weak markets in marine."
East is probably right to try to settle shareholders' nerves ahead of time. Plummeting profits pushed the company to cut its dividend for the first time in 24 years in February, and it has issued multiple profit warnings over the last two years.
Fund manager Neil Woodford has already given up on the company, selling his stake, which was reported to be worth £232m, last year. Meanwhile, at the start of this year, ratings agency Standard & Poor's downgraded its outlook rating from stable to negative.
Last month, the company also revealed it would have to let go 150 more of its senior managers.
However, as the 2015 annual report noted there will be no salary increases for the executive team in 2016 and no annual bonus payout for 2015, shareholders are more likely to feel happier about executive pay levels.
The company also added in a statement ahead of the AGM that it expects brighter days ahead, with performance in the second half of the year outpacing that of the first. The manufacturer also said it was on track to deliver £30-50m in cost savings this year.
However, the markets did not share the same sentiment as the executives, with shares trading down 4.7 per cent at 615p around 10am London time.
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