The group said it would maintain, rather than raise, its final dividend in order to retain a degree of financial flexibility.

“While we have made good progress in our cost cutting and efficiency programmes, more needs to be done to ensure we drive sustainable margin improvements within the business,” Chief Executive Warren East said.

“Over the next few months we will conclude our review of our strengths and investment opportunities and set out an appropriate vision for the business and the best way we can deliver sustainable shareholder value.”

Rolls-Royce has faced challenges across its business in recent years, weighing on its revenue and profit. That has prompted East, who took the job in 2015, to restructure the company to respond to changes in civil aviation and other sectors.

The group said it expected “modest performance improvements” this year.

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