Hydrogen Economy
21 Dec 2016
$408m Contract "Modification" Surprised no RNS on this which was reported by ReutersI trust modification means increase! SP is somewhat modified this morning.H2[link] ROLLS-ROYCE: Rolls-Royce Corp of Indianapolis, Indiana, a unit of Rolls-Royce Holdings Plc, has been awarded a $408 million modification to a contract to provide maintenance support for V-22 AE1107C engines for the U.S. Marine Corps and Air Force, the Pentagon said in a statement on Tuesday.
LK Hyman
28 Nov 2016
Re: Fresh woes for Rolls-Royce -Telegrap... Jose,"Rolls then backtracked"Fingers crosses that the RR fellers who hammer the turbine blades into the engines are more competent than them spreadsheet jockeys, eh?LKH on the flybridge no position here
JoseFrio
28 Nov 2016
Re: Fresh woes for Rolls-Royce -Telegraph Thanks HE for posting the article.This was amusing in a gallows-y kind of way:"First the company’s slide presentation said revenues in this key category would rise. Rolls then backtracked and said they would in fact be flat...Rolls added that the mistakes were not deemed to be price sensitive information"
Hydrogen Economy
28 Nov 2016
Fresh woes for Rolls-Royce -Telegraph Telegraph seem to have RR firmly in their sights, but then, RR are giving them plenty of ammuniton. Reality is that situation like RR take years rather than weeks to turn around, but the current feeding frenzy will no doubt be exploited by the corporate vultures to drive down the SP for bid or activist investors to step in. Long term, provided the engineering and manufacturing capability is not sacrifced, this business should surely prosper in a world where there will be big increase in the number of people who can afford to fly across developing markets, but East needs to get some wins on the scoresheet soon to steady the ship and avoid RR getting swallowed or broken up. ARM shows the market is not prone to sentiment.H2[link] faces fresh embarrassment after it admitted parts of its financial forecasts were wrong and it had to send out a correction.The blunders came in the engineering group’s disastrous capital markets day two weeks ago which sent the shares plunging, and has seen Rolls draw criticism from City analysts. Rolls’s predictions of where the market was going for sales of large airliner engines were wrong for 2018 and 2019. First the company’s slide presentation said revenues in this key category would rise. Rolls then backtracked and said they would in fact be flat. Sales of large airline engines are massive part of the Rolls’s business, representing almost a quarter of the company’s total revenue of £13.3bn last year. Rolls made a similar mistake about revenue from servicing all types of its engine, originally claiming 2017 would rise, then correcting this to being flat. Income from repairing engines from business jets were also downgraded for 2016 and 2017 from flat to negative.The corrections came two days after the capital markets event, with Rolls sending an email after the markets closed to notify those who had registered with its investor relations department.The errors raised questions about how successful Warren East’s attempts to turnaround Rolls are. Mr East was parachuted in a year and half ago to get the company back on track after a series of profit warnings. He pledged to simplify the business and make it better at reacting to the changing market.One of his key messages was about forecasts of performance - preferring to give a general direction of travel rather than an exact number. “doing that you risk being precisely wrong,” he said. Analysts hit out at the Rolls’s blunder, with one saying executives “are so bust trying to manage the numbers, they are forgetting to manage the business.”Another veteran Rolls watcher said the company “seems lost in a fog of numbers, it’s like they don’t know where they are going”.The fact that Rolls took two days to correct the mistake and then sent it only to those who registered and so late on a Friday evening, instead of making a regulatory announcement, also raised eyebrows.However, the company played down the mistakes, saying that when finance chief David Smith presented the forecasts correctly. “The words were right but the slides were wrong,” a spokesman said.Rolls added that the mistakes were not deemed to be price sensitive information, and so the corrections did not require a regulatory announcement.
Hydrogen Economy
20 Nov 2016
Telegraph "Crisis Looms" Seems like there is a concerted effort to talk down RR.Zafar Khan, analyst at Societe Generale, saidvaluation yardsticks such as the price-earnings ratio, or the enterprise value to earnings or sales....With the accounting changes these measures have gone out the window – you just can’t put a value on it.The dire predictions are because Rolls has to “unlink” income from sales of its aircraft engines – which are often made at a loss – from the long-term revenues generated servicing them."Mr Khan described this as “scary”, adding that sales of jet engines for airliners represent about half of the company’s revenue."Well that has been the business model for many years and valuing Companies with accounting charges is what you bunch of bankers are overpaid because you were assumed understand, seems not.Clearly RR has issues and needs to rebuild confidence, fix some technical issues. I expect SP to suffer pain for some time to come, long term - how many businesses have such a strong worldwide position in a technology led business with only one competitor of similar scale. (Ah well, maybe Samsung....oh heck)H2[link] are growing for Rolls-Royce after a disastrous attempt to explain itself to the City, with the engineering giant now being compared to dotcom stocks that convinced investors to gamble on vague ideas.Analysts said they are struggling more than ever to put a value on the FTSE 100 engineer after its capital markets event last week trashed calculations of the company’s value.A bid by Rolls’s chief executive Warren East to ease concerns over cash flow also failed. Senior City figures told The Sunday Telegraph there is now a serious fear that it could face another crisis next year. Mr East, who was tempted out of retirement to oversee a turnaround at Rolls, has seen his task made tougher by new accounting rules that are likely to slash profits.The admission – combined with a non-executive director resigning over bribery allegations and problems with a £6.2bn engine order – saw Rolls shares fall 13pc over the following three days.Zafar Khan, analyst at Societe Generale, said: “Despite being a mature manufacturing company, Rolls is now a ‘concept stock’ like the dotcom companies of the 2000s or the biotech stocks of the Eighties where people were buying an idea.“The simple story on Rolls is that people buy stocks based on certain valuation yardsticks such as the price-earnings ratio, or the enterprise value to earnings or sales,” said Mr Khan, who has a sell rating on the shares.“With the accounting changes these measures have gone out the window – you just can’t put a value on it.”David Smith, the departing finance chief, said that under the new rules the company’s 2015 annual profit of £1.4bn would be cut by £900m. The company is also expecting cashflow to be between negative £100m and negative £300m this year, breaking even next year, and around £500m positive the year after.The dire predictions are because Rolls has to “unlink” income from sales of its aircraft engines – which are often made at a loss – from the long-term revenues generated servicing them.Mr Khan described this as “scary”, adding that sales of jet engines for airliners represent about half of the company’s revenue.“At the last results, Rolls had earnings before interest and tax of £1.5m, and civil engines were £800m of that. Take the £900m off that from the new accounting rules and the company looks very bad,” the analyst said, adding the dividend could be cut again to stave off a cash crisis.His views were echoed by Deutsche analyst Ben Fidler, who described the new accounting rules as having a “materially worse than expected impact” on Rolls. ROllsRolls makes a £1m to £2m loss on each engine it sells but makes up the money on servicing them Both also raised concerns a
MoleMan99
18 Nov 2016
Re: Bad news? For all the bribery and hedging book fiascos, you could at least rely on the engineering brilliance.Oh dear.
gamesinvestor
18 Nov 2016
Dodgy Davies [link] from his non exec positionGames
gamesinvestor
18 Nov 2016
Re: Bad news? Based on Emirates drubbing of the Trent engine quality just 3 hours ago, you are likely to get your price, and possibly lower.[link] -- stock down 6.08% as I type
triceratops
18 Nov 2016
Re: Bad news? I've been looking at buying some RR for a while now. Medium/long term I expect they will be just fine. I thought I'd missed the boat when they dipped below 600p earlier in the year, I will take the plunge if we get back to the 580-600p range.Tops
Hyperproject
17 Nov 2016
Re: Bad news? Good decision.....me too.
Uncle Doug
17 Nov 2016
Bad news? Seems the weather has changed at RR and I'm under water here. Bad month, down 10%. Down 5% today. Been a good year but the recent momentum is a bit disappointing. Warren East sounded all very positive at Farnborough back in July but now we get words like "uncertain, challenging, shrinking, very weak and mixed". So ... here's the plan: I'm gonna continue to hold for the long term although I feel there may be more falls to come in the short term. I will buy more when I feel RR has turned the corner.
rovernut
02 Nov 2016
Re: C Shares I couldn't see any reason to keep them. Thought maybe I'd missed something. Thanks.
Hardboy
01 Nov 2016
Re: C Shares What use is keeping them?
rovernut
01 Nov 2016
C Shares I have no idea what to do with my C shares! Should I cash 'em in or keep them...whats the consensus?
Doggedly persevering
01 Nov 2016
SFO bribery investigation This SFO investigation still has years to go and puts the reputations of both organisations on the line. It looks very bad.The political mood is against crony capitalism and cynical owners.Rolls' best chance is some sort of government sweetheart deal like Nissan just got, but I'm guessing they won't do that twice.Glad to have got out this morning.
