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ROLLS-ROYCE ANNOUNCES ANNUAL 1992 RESULTS

 RESTON, Va., March 11 /PRNewswire/ -- Rolls-Royce issued the following:
 -- Before exceptional items and taxation profit was 84 million
 pounds (1991: 109 million pounds).
 -- Exceptional items of 268 million pounds (1991: 58 million
 pounds) were charged against profit. This included
 provisions, largely for restructuring, of 230 million pounds.
 -- After exceptional items, loss before tax was
 184 million pounds (1991: profit before tax 51 million
 pounds).
 -- Dividend reduced to 5p for the year (1991: 7.25p).
 -- Year end net cash was 84 million pounds (1991: 18 million
 pounds).
 -- Strong year end order book of 6.7 billion pounds
 (1991: 6.6 billion pounds).
 "Depressed market conditions have continued longer than forecast. However, the vigorous cost reduction program we are undertaking and the actions we have taken to preserve cash, have enabled us to maintain a strong balance sheet, with positive cash being generated during the year.
 "We have a strong order book and the continuing investment in Research and Development on a new range of competitive products, will further enhance our market opportunities.
 "The board remains committed to delivering value for shareholders by keeping Rolls-Royce at the forefront of British and world engineering and expanding our business in international markets. I remain confident in the strength and position of our company."
 Sir Ralph Robins
 Chairman
 Rolls-Royce today reported a profit of 84 million pounds, before exceptional items and taxation, compared to 109 million pounds in 1991. However, exceptional items of 268 million pounds created a loss before tax of 184 million pounds (1991: profit before tax 51 million pounds).
 Exceptional items included 38 million pounds restructuring payments during 1992, which led to an underlying profit before tax of 46 million pounds (1991: 51 million pounds). An additional exceptional provision of 230 million pounds was made. Of this, 180 million pounds related to further employee and site reductions and 50 million pounds to provide against potential problems arising from customer weaknesses. Employment levels are to be reduced by 3,000 in 1993, and a further 2,000 the following year.
 To reflect the difficult market conditions during a time of high investment a reduced final dividend payment has been recommended making the payment for the year 5.0p (1991: 7.25p)
 Turnover at 3,562 million pounds was very similar to the 1991 level. Aerospace increased by 5 percent, including a slow recovery of civil spares volumes which have made good about half the decline suffered in 1991. Industrial Power fell, slightly, to 1,419 million pounds, 40 percent of the total. Overseas sales accounted for 70 percent of turnover. A weak U.S. dollar reduced sales and profit by 30 million pounds compared to the rate achieved in 1991.
 Although it was a difficult year for the Aerospace Group with continuing recession in the airline industry and reductions in defense spending, Rolls-Royce was successful in exploiting the available market. The Trent engine won further orders and the BR700, being developed jointly with BMW, won a launch order worth $500 million from Gulfstream. Confirmation of the European Fighter Aircraft program, and the sale of additional RB199-powered Tornados to Saudi Arabia, were encouraging for the Military Engine Business.
 The Industrial Power Group, with a 4 percent fall in turnover, had a generally satisfactory year with good U.K. and overseas orders for industrial power generation and electrical transmission equipment and a buoyant gas turbine market for oil and gas pumping. The industrial derivative of the Trent aero-engine -- a 50MW machine -- was launched during the year. This will be developed by the Canadian subsidiary company and will be marketed through the new alliance with Westinghouse.
 In order to maintain and enhance the company's strategic position, and to meet customers' requirements, Research and Development expenditure continued at a high level. The gross spend during the year was 482 million pounds, of which 229 million pounds was funded by the company. Rolls-Royce does not see any change in this pattern in the immediate future.
 The company funded Research and Development was largely related to the Trent engine which is on schedule and has run at 80,600 pounds thrust -- well above the Trent 700 certification level for the Airbus A330.
 Design of the Trent 800, for the Boeing 777, is now finalized and the program is on schedule for a first engine run during 1993.
 The balance sheet remained strong, with shareholders' funds in the region of 900 million pounds. The company had net cash balances of 84 million pounds at the year end and a cash generation of 66 million pounds during the year.
 The order book, which includes only firm, signed business, increased to 6.7 billion pounds, despite the depressed market conditions.
 Commenting on the results Sir Ralph Robins, Chairman of Rolls- Royce said: "Depressed market conditions have remained longer than forecast. However, we are one of the strongest-placed companies in the power systems business, with our large order book, strong balance sheet and comprehensive product portfolio. We will continue our consistent strategy for increased penetration of world markets.
 "We are well placed to build upon our increasing share of the civil engine market. The number of Rolls-Royce engines in service increases each year and, without doubt, they will provide an important boost to spares business in the future.
 "In the industrial power sector I consider that the alliance with Westinghouse and the launch of the industrial Trent will pave the way towards future growth in our power generation activities.
 "In the short term market conditions remain difficult, at a time when continued high investment is necessary. The board has considered the outlook and believes that it is appropriate at this time to recommend a reduced final dividend payment of 2.45p, making 5.0p for the full year (1991: 7.25p).
 "The board remains committed to delivering value for shareholders by keeping Rolls-Royce at the forefront of British and world engineering and expanding our business in international markets. I remain confident in the strength and position of our company."
 GROUP RESULTS
 for the year ended Dec. 31, 1992
 (in millions of pounds)
 1992 1991
 Turnover 3,562 3,515
 Operating profit 325 335
 Research and development (net) (229) (216)
 Income from interests in associated undertakings 6 6
 Net interest payable (18) (16)
 Profit before exceptional items and taxation 84 109
 Exceptional items(A) (268) (58)
 (Loss)/profit on ordinary activities
 before taxation (184) 51
 Taxation (25) (32)
 (Loss)/profit on ordinary activities
 after taxation (209) 19
 Attributable to minority interests
 in subsidiary undertakings 7 5
 (Loss)/profit attributable to the
 shareholders of Rolls-Royce plc (202) 24
 Dividends - interim 2.55p (1991 2.55p)
 per share (25) (25)
 - final proposed 2.45p (1991 4.7p)
 per share (23) (45)
 Transferred (from) to reserves (250) (46)
 (Loss)/earnings per ordinary share
 Net basis (20.91)p 2.49p
 Net basis before exceptional items 6.62p 8.32p
 (A) Exceptional items
 Provision for restructuring and
 severance payments 180 --
 Provision against customer problems 50 --
 Total 230 --
 Restructuring and severance payments
 made in the year 38 51
 Charges in relation to overseas subsidiaries -- 7
 Total 268 58
 (Loss)/earnings per ordinary share on the net basis are calculated by dividing the (loss)/profit attributable to the shareholders of Rolls-Royce plc of (202)m pounds (1991 24m pounds) by 966 million (1991 962 million) ordinary shares, being the average number of ordinary shares in issue during the year.
 Earnings per share before exceptional items are calculated as for the net basis but after adjusting for exceptional items, net of tax relief.
 The results presented above have been prepared on a basis consistent with the previous year, in order to facilitate comparison with prior period figures.
 GROUP BALANCE SHEET
 at Dec. 31, 1992
 (in millions of pounds)
 1992 1991
 Fixed Assets
 Tangible assets 874 836
 Investments 62 49
 Total 936 885
 Current assets
 Stocks 696 809
 Debtors - amounts falling due within one year 798 786
 - amounts falling due after one year 144 145
 Short-term deposits and cash 479 410
 Total 2,117 2,150
 Creditors - amounts falling due within one year
 Borrowings (214) (57)
 Other creditors (1,163) (1,167)
 Net current assets 740 926
 Total assets less current liabilities 1,676 1,811
 Creditors - amounts falling due after one year
 Borrowings (181) (335)
 Other creditors (173) (160)
 Provisions for liabilities and charges (408) (167)
 Total 914 1,149
 Capital and reserves
 Called up share capital 194 193
 Share premium account 241 242
 Revaluation reserve 125 128
 Other reserves 16 20
 Profit and loss account 323 539
 Shareholders' funds 899 1,122
 Minority interests in subsidiary undertakings 15 27
 Total 914 1,149
 The financial information set out above does not constitute the group's Statutory accounts for the years ended Dec. 31, 1992, or 1991. Statutory accounts for 1991 have been delivered to the registrar of companies, whereas those for 1992 will be delivered following the annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
 ANALYSIS BY BUSINESS SEGMENT
 (in millions of pounds)
 Turnover (Loss)/profit Net Assets(A)
 before interest
 1992 1991 1992 1991 1992 1991
 Analysis by business:
 Aerospace 2,143 2,033 (220) (6) 582 830
 Industrial Power 1,419 1,482 54 73 248 301
 Total 3,562 3,515 (166) 67 830 1,131
 Geographical analysis
 by origin:
 United Kingdom 3,214 3,119 (184) 48 692 960
 Other 348 396 18 19 138 171
 Total 3,562 3,515 (166) 67 830 1,131
 Geographical analysis
 by destination:
 United Kingdom 1,077 1,057
 Rest of Europe 418 555
 USA 1,123 1,064
 Canada 142 142
 Asia 506 381
 Africa 156 202
 Australasia 97 74
 Other 43 40
 Total 3,562 3,515
 Exports from
 United Kingdom 2,137 2,062
 Sales to overseas
 subsidiaries (122) (89)
 Sales by overseas
 subsidiaries 470 485
 Total Overseas 2,485 2,458
 (A) Net assets exclude net cash balances of 84m pounds (1991 18m pounds).
 (B) The segmental analysis of exceptional items is Aerospace 237m pounds (1991 32m pounds) and Industrial Power 31m pounds (1991 26m pounds).
 GROUP PROFIT AND LOSS ACCOUNT - PREPARED UNDER FRS 3
 for the year ended Dec. 31, 1992
 (in millions of pounds)
 1992 1991
 Turnover 3,562 3,515
 Cost of sales - including exceptional items of
 268m pounds (1991 58m pounds) (3,307) (3,017)
 Gross profit 255 498
 Commercial, marketing and product support costs (105) (96)
 General and administrative costs (93) (125)
 Research and development (net) (229) (216)
 Operating (loss)/profit (172) 61
 Income from interests in associated undertakings 6 6
 (Loss)/profit on ordinary activities
 before interest (166) 67
 Net interest payable (18) (16)
 (Loss)/profit on ordinary activities
 before taxation (184) 51
 Taxation (25) (32)
 (Loss)/profit on ordinary activities
 after taxation (209) 19
 Attributable to minority interests in subsidiary
 undertakings 7 5
 (Loss)/profit attributable to the shareholders of
 Rolls-Royce plc (202) 24
 Dividends (48) (70)
 Transferred from reserves (250) (46)
 (Loss)/earnings per ordinary share
 Net basis (20.91)p 2.49p
 Net basis before exceptional items 6.62p 8.32p
 This profit and loss account has been prepared in accordance with FRS 3, which companies have been asked to adopt as soon as possible.
 No material acquisitions or discontinued operations have occurred.
 -0- 3/11/93
 /CONTACT: Robert Stangarone, 703-318-9002, or Dick Dalton, 703-318-9005, both of Rolls-Royce/


CO: Rolls-Royce ST: Virginia IN: ARO SU: ERN

TW -- DC004 -- 4999 03/11/93 09:31 EST
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