RYCEY Rolls Royce Holdings PLC (PK)

   By Carlo Martuscelli 
 

Rolls-Royce Holdings PLC (RR.LN) said Wednesday that it is stockpiling inventory in preparation for Brexit as it guided for 2018 results at the upper end of its guidance range.

The British engineering company is in talks with all its suppliers, and has reviewed its logistics options. Rolls-Royce said it will issue an update once it has a clearer view of what the U.K.'s departure from the European Union will entail.

The company now expects operating profit of between 400 million pounds to 500 million pounds ($502.4 million to $628 million), and free cash flow of between GBP450 million to GBP550 million. Core operating profit--which strips out L'Orange and the commercial marine unit--is expected to be between GBP450 million to GBP550 million.

Core operating profit--which also excludes L'Orange and the commercial marine unit--is expected to be between GBP450 million to GBP550 million.

The company completed the sale of L'Orange to Woodward Inc. (WWD) earlier this year, and also agreed to sell the commercial marine unit.

Rolls-Royce said the restructuring it announced in June is proceeding as expected and is on track to reduce headcount by 4,600 in the next two years. The sale of the marine division is also proceeding as planned, with completion expected in the first quarter of 2019, the FTSE 100 company said, adding that it expects net proceeds of between GBP350 million to GBP400 million.

Full-year growth in the large engine segment is anticipated in the mid-teens, Rolls-Royce said. Production of its Trent 7000 engines is expected to ramp up significantly in 2019.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

December 12, 2018 03:02 ET (08:02 GMT)

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