06/07/2015 11:57 BST | Updated 06/07/2016 06:12 BST

Rolls Shares Hit By Profits Warning

Shares in Rolls-Royce have slumped as much as 10% as the engine-maker issued another profits warning and cancelled its share buyback programme.

The company, which has major bases in Bristol and Derby, blamed a number of factors including reduced demand for business jets and weaker sales in its marine market.

The firm, which has issued a series of profits downgrades over the last 12 months, now says its annual group underlying profit will be between £1.3 billion and £1.5 billion, as much as 5% lower than it had previously suggested.

The news comes just four days after its new chief executive Warren East, took up his post from outgoing boss John Rishton.

Mr Rishton left at a difficult time for the business, which announced its first full-year fall in revenues for a decade in February.

Mr East was previously the boss at chip designer ARM Holdings, which he transformed into a global firm responsible for the technology behind nearly all mobile phones and many other electronic devices during his tenure, which lasted just under 12 years and ended in 2013.

At its marine business Rolls said it expected its annual underlying profit to be between break even and £40 million, compared to previous guidance of between £90 million and £120 million.

It added it expected its interim underlying profit before tax this year will be phased more to the second half than in 2014, driven by its civil aerospace and power systems departments.

The group said its first half underlying profit before tax is expected to be between £390 million and £430 million, or around 30% of its full year results, compared with roughly 40% a year ago.

The firm said its downturn would also impact profits in 2016.

It also added that as a result of its problems it would end its share buyback programme, having completed £500 million of the planned £1 billion programme in the first half of the year.

Mr East said: "I am clearly disappointed by today's announcement and the impact this will have on our investors and employees.

"Notwithstanding the market developments, it is our responsibility to build a business that is sustainable and resilient no matter what is thrown at us and this will be my fundamental priority for the next few years."

In May Rolls-Royce said it would cut another 600 staff in the face of falling oil and gas prices, which have impacted its marine business, and other challenging market conditions.

This came on top of a November plan to axe 2,600 jobs, including a significant number in the UK, as a result of the sustained downturn the group faced. In the UK the firm employs 25,000 staff and a total of 55,000 worldwide.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "The downgrading of profit expectations is highly disappointing.

"In all, the company's prior push to reduce earnings volatility and surprises looks to have been completely unwound, with investors today suffering another shock."