Rolls Royce hails ‘strong start’ to year but warns on tariff uncertainty

Boss Tufan Erginbilgic said the company, which specialises in making aircraft engines, is also closely monitoring the potential impact of inflation and a wider economic slowdown on demand for its products.

He added: “Our transformation of Rolls-Royce is progressing strongly and we continue to expand the earnings and cash potential of the business.

“We are creating a more resilient and agile Rolls-Royce that is better equipped to respond to changes in the external environment. As a result, we have had a strong start to the year.”

His comments come a month after US President Donald Trump announced a major plan for tariffs on imports into the country.

Yaterday, the firm held its profit and cash flow guidance for the rest of the year despite “the uncertainties associated with tariffs and continued supply chain challenges”.

Rolls-Royce has been undergoing a major turnaround plan under chief executive Mr Erginbilgic which included cutting 2,500 jobs.

He said the business is making “good progress on our transformation” and is confident of meeting its financial guidance for the year. It is on track to deliver between £2.7bn and £2.9bn of underlying operating profit for 2025.

Bosses said it is continuing to see “strong demand” for its products and services globally, with “robust” order volumes in its defence business.

Commenting on company’s latest announcement, Russ Mould, investment director at AJ Bell, said: “Rolls-Royce is one of the most vulnerable UK-listed companies to US tariffs because of its involvement in aircraft parts, a key export to the States.

“Had the tariff tantrum happened five years ago, Rolls-Royce might have struggled to cope given the business was weak and had lost its way.

“Having been nursed back to full health, it now stands a much better chance of coping with tariff pressures and management has offered such reassurance to the market.

“Given the widespread uncertainties, investors are now taking unchanged guidance to be a massive win. The fact Rolls-Royce is sticking with previous earnings and cash flow expectations has prompted another leg-up for the share price.”

Rolls Royce's latest update comes after the Government last month announced a multi-billion-pound increase to Government-backed financing for British firms.

The Government said the new package will give UK Export Finance the power to expand financing support for British businesses by £20bn. Rolls Royce had previously been a beneficiary of similar Government programmes.