In a statement published to coincide with a recent Capital Markets event, Rolls-Royce chairman Warren East praised the Derby-based engineering giant’s significant progress over the past 12 months, adding that its outlook for 2016 is unchanged.

His comments follow a major restructuring initiated earlier this year, due to weak demand.

In the statement, Mr East said that the “transformation programme” is “well on track” and that cost savings for the year are expected to be at the “top end of the £150-200 million target range”.

However, he added that the market outlook is mixed. “Demand at the group’s civil aerospace business is strong, and the defence outlook remains positive, but its power systems markets have been weaker than forecast.”

He also said that there are “no signs of recovery” in the oil and gas market, and “further revenue weakness is expected in 2017”.

He concluded: “We have made steady progress in 2016 to date, delivering a ramp-up in large-engine production and implementing the first stage of our transformation programme. Overall, we remain comfortable that our expectations for profit and free cash-flow remain achievable.”