Rolls-Royce shares fly on upbeat targets

Rolls-Royce shares fly on upbeat targets
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London: British engine maker Rolls-Royce, fresh from announcing 4,600 job cuts to slash costs, sent its share price flying on Friday by posting optimistic targets.

Shares in Rolls, whose engines are used in Airbus and Boeing aircraft, soared 9.27 percent to 964.60 pence in late morning deals on London’s falling stock market.

The stock had already gained 6.54 percent on Thursday after the industrial giant unveiled a drastic restructuring for the next two years.

Rolls-Royce said in a new statement on Friday that it was now “well placed” to beat its cash flow target of £1.0 billion ($1.3 billion, 1.14 billion euros) by 2020.

This week’s restructuring announcement, that will see Rolls shed mostly British management roles, seeks to eventually produce £400 million of annual cost savings.

Rolls-Royce added on Friday that the cost of repairs it has been forced to carry out on Trent plane engines had increased by some £100 million to around £440 million.

The group said it had encountered “further issues” with the Trent 1000 engine since its previous announcement in early March.

Used by the Boeing 787 Dreamliner and Airbus A380 superjumbo, the engines have seen some parts wear quicker than expected, forcing Rolls to carry out costly repairs.

AFP