Shares in British engineering company Rolls-Royce rose more than 5 per cent on Tuesday morning, after the group said that 2016 profit would beat expectations and announced that it had agreed to pay £671m to British, US and Brazilian authorities to settle bribery and corruption claims.
Rolls-Royce, which is in the midst of a cost-cutting programme launched back in 2015, said in a statement that it has reached a so-called “deferred prosecution agreement” with the UK’s Serious Fraud Office.
That agreement is subject to final approval by the High Court on Tuesday.
Elsewhere, the company reached similar agreements with the US Department of Justice and, what it calls a Leniency Agreement with Brazil’s Ministério Público Federal.
Rolls-Royce, whose customers include airlines, armed forces and navies in more than 150 countries, said that these agreements relate to cases of bribery and corruption involving intermediaries in a number of overseas markets, concerns about which the company passed to the SFO from 2012 onwards.
“These are voluntary agreements which result in the suspension of a prosecution provided that the company fulfils certain requirements, including the payment of a financial penalty,” the company added.
Rolls-Royce is expected to report full-year 2016 results on 14 February and said on Tuesday that “an appropriate update on the implications of these agreements will be provided at that time.”
It added, however, that “early indications are that the Group has had a good finish to the year with both profit and, in particular, cash expected to be ahead of expectations.”
For 2015, the company booked underlying revenue of £13.4 bn.
