Rolls-Royce investors could be forgiven for being nervous about the company’s half-year results after a dismal 18 months since the coronavirus hit
Rolls-Royce investors can be forgiven for being nervous about the company’s half-year results, which are due out next Thursday.
The engine maker – which is separate from the car brand – has had a miserable 18 months since Covid struck. It makes most of its money from the number of flight hours from the engines it supplies to large aircraft that travel long-haul routes.
And as budget airlines ramp up their flight schedules to take Brits on short beach holidays, the recovery for long-haul specialists has been tepid – not helped by the US, in particular, still refusing to let British and European tourists in.
More than likely, this has continued to hit the Civil Aviation Rolls arm.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “We suspect the division is still under pressure as its bread and butter manufactures and maintains engines for wide-body aircraft, which mainly power long-haul aircraft.”
To counter the downturn, Rolls raised additional funds and embarked on a massive cost-cutting plan, including cutting 9,000 jobs and selling parts of the company worth £2 billion.
It has had some setbacks with these sales, but is still pursuing the sale of its Spanish division, ITP Aero.
Hoy added: ‘We expect an update on Rolls’ progress on the sale of ITP Aero and whether it is on track to meet its target of £1.3 billion in annual savings.’
Shares fell 2.4 percent or 2.47p to 99.71p yesterday.