Rolls-Royce halves dividend after full-year profit fall
Published 12/02/2016 | 08:37
Britain's Rolls-Royce halved its dividend to shore up its finances after a slowdown in demand for some of its engines caused full-year profit to fall 16pc.
The world's second largest maker of aircraft engines, which issued three profit warnings last year, left its 2016 guidance unchanged.
Rolls-Royce had alerted investors to the risk to its dividend in November, when it said it was putting the payout under review amid a further deterioration in its markets.
The company said it would pay shareholders a final dividend of 7.1 pence per share compared to the 14.1 pence it paid out last year, a bigger reduction than analysts expected.
Chief Executive Warren East said that the company recognized the importance of paying a "healthy" dividend to shareholders.
"Subject to short-term cash needs, we intend to review the payment so that it will be rebuilt over time to an appropriate level," he said.
For 2016, Rolls-Royce stuck to its guidance for profit to be 650 million pounds lower than this year, in line with the warning it had given in November, as it expected to be hit by as a slowdown in Asia for servicing older aircraft engines and ongoing weakness in demand from energy customers.
The company reported underlying pretax profit of 1.36 billion pounds last year, a drop of 16pc from 2014, and in line with a consensus forecast.