Rolls-Royce warns of flat profits

The company said the figures excluded adverse foreign exchange translation effects (estimated at £40 million on profit and £300m on revenue, at current exchange rates) and a one-off charge in the Marine division (estimated at £30m) "to rectify a product quality issue". It added: "At a business level, we maintain guidance except in Marine, where we now expect a reduction of around 10% in profit and revenue compared to 2013, caused by the one-off charge and lower services volume." The Group said it expected its financial performance in 2014 to be weighted to the second half of the year, "with around two thirds of the full year 2014 profit being generated in the second half". It said: "This phasing reflects, in the first half, the one-off charge in Marine and higher restructuring and in the second half, phasing of cost reduction improvements and trading. As a result, free cash flow during the first half is expected to be between £200m and £400m lower than during the first half of 2013. "We remain confident that the Group will resume growth in 2015." Rolls-Royce will hold a briefing for institutional shareholders and research analysts on Thursday 19 June in London and will report the Group's results for the six month period ending 30 June 2014 on 31 July 2014.