Uncle_Doug
15 Jun 2018
in for a penny When I said £9 , ahem, of course I meant £10. Sold out this morning (after about 30 attempts to deal) at just over £10. Not bad - 23% rise in 2 weeks !
Hydrogen_Economy
14 Jun 2018
RR Restructuring Announced Today’s announcement was well flagged “reduction of around 4,600 roles, predominantly in the UK where the majority of our corporate and support functions are based. Around a third of these roles are expected to leave by the end of 2018. The programme is expected to gain further momentum through 2019, with full implementation of headcount reductions and structural changes by mid-2020. We will honour previous commitments for no compulsory redundancies of represented staff. The total cash cost of the restructuring is expected to be £500m which includes the cost of redundancies Full year net cost savings from this restructuring are expected to reach a run rate of £400m per annum by the end of 2020. FY18 guidance for Group FCF of around £450m +/- £100m remains unchanged.†(This puts the 400m savings in context- H2) “We are currently undertaking our biggest ever increase in large engine production, targeting over 600 wide-body engines a year by the end of this decade…poised to become the world-leader in large aircraft engines, powering over half of the world’s passenger wide-body fleet within the next few years, compared to 22% just 10 years ago.†The last statement sums up the long term value of Rolls, in a technology led, fast growing sector with massive aftermarket sales, that is a heck of position to be in. H2
Uncle_Doug
13 Jun 2018
in for a penny @Hydrogen_Economy Thanks for this update. Explains why SP can’t escape low 800s maybe. I expect Warren East to turn things around … eventually. Will buy another tranche if it falls to say 750.
Hydrogen Economy
02 Jun 2018
Re: in for a penny Doug Nice to hear someone else interested here.I sliced some around 930p and bought a few back at 824p, but am adding cautiously. It has recovered to 837p and is hopefully heading back up above 900 but would not be too surprised if we see further falls. as I see that the EPS forecast for next few years has been cut significantly, in march 4-traders was indicating consensus EPS as 31.9, 39.9 & 48.7, now it is showing 18.6, 29.6, 43.9p. [link] a massive cut in the 2018 number, presumably reflecting the problems with the Trent 1000 which seem to be a growing problem of rectification cost and reputation. That said, RR will resolve this and move forward selling into an aviation market which is expected to grow substantially and for a considerable period as the growing middle class in Asia and elsewhere push up aircraft demand. That and the huge locked in aftermarket sales. Given the technology moat, limited number of competitors, rising demand and follow-on income, it would take monumental stupidity to fail. Sadly, that’s a quality British Corporate Management has demonstrated no shortage of. Rolls Royce was desperately in need of change, I believe Warren East is up to the task and will turn the company around if the short term thinkers in the city allow him the space. I plan to hold for the long term and will buy into any further short term dip. GLA H2
Uncle Doug
01 Jun 2018
in for a penny Bought a few at 821p. Think these are oversold and will recover to £9 easily enough.
Hydrogen Economy
13 Apr 2018
Additional Cost for Trent 1000 Inspections This has hit RR SP today. It comes as no great surprise, the risk remains that additional measures will be needed and cost grows before they finally implement a fix.Lets hope that the "reprioritisation of discretionary spend" to avoid impact to Cash Flow doesn't lead to new issues!H213 April 2018TRENT 1000 PACKAGE C UPDATE At our 2017 Full Year results on 7 March 2018 we outlined our management of certain Trent 1000 engine in-service issues and the estimated costs relating to our implementation of the solutions to address those issues.As part of our ongoing inspection and testing of those engines we have decided to carry out additional engine inspections to those previously planned. The increased inspection frequency is driven by our further understanding of the durability of the Trent 1000 Package C compressor, a condition that we highlighted earlier this year. These inspections will be supported by service management and flight operations guidance to airlines to be issued by the airworthiness authorities. This will unfortunately lead to additional disruption for our customers. There are 380 Package C engines currently in-service with airlines. This new regime does not impact Trent 1000 Package B engines or Trent 1000-TEN engines. While the compressor technical issue was known at the time of our results, the requirement for more regular inspections will lead to higher than previously guided cash costs being incurred during 2018. We are reprioritising various items of discretionary spend to mitigate these incremental cash costs and our guidance for 2018 FCF remains unchanged at Group FCF for 2018 of around £450m +/- £100m. Warren East, CEO, Rolls-Royce, said: "Our focus is on supporting our customers and doing all we can to minimise any impact on their operations. We sincerely regret the disruption this will cause to our customers and our team of technical experts and service engineers is working around the clock to ensure we return them to full service as soon as possible. We will be working closely with Boeing and affected airlines to minimise disruption wherever possible."
Hydrogen Economy
09 Apr 2018
RR sells L'Orange to Woodward Inc Looks like a reasonable deal, not core business and long term supply deal done. sold at 9.5 x EBITDA which I guess fits for the sector. Should help with simplification of RR, market likes it.H2 Rolls-Royce announced today that it has signed an agreement to sell L'Orange, a wholly owned subsidiary of Rolls-Royce Power Systems, to Woodward Inc., for an enterprise value of €700 million (£610 million).L'Orange supplies fuel injection technology for engines that power a wide range of industrial applications including marine power and propulsion systems, special-application vehicles, oil and gas processing, and power generation. L'Orange will remain an important partner and supplier for Rolls-Royce Power Systems in the future through a long-term supply agreement, with an initial term of 15 years.In 2017, L'Orange reported pro forma sales of €244 million, pro forma underlying EBITDA of €74 milli
II Editor
07 Mar 2018
NEW ARTICLE: Trends and Targets for 8/03/2018 " THE US DOLLAR vs THE JAPAN YEN (FX:USDJPY) This particular pairing is usually quite logical in its behaviour. The results in the immediate situation where we've no choice but to regard it as heading toward 102 currently. Some sort of bounce ..."[link]
tradingup
07 Mar 2018
CUTTING THROUGH THE FOG Seems like Warren East's magic dust which was such a boon to ARM holdings is nowsprinkling itself on RR
II Editor
07 Mar 2018
NEW ARTICLE: Rolls flying high after results milestone "While the LSE:RR.:Rolls-Royce recovery still has some way to go, today's annual results from the engines giant did at least banish a few painful memories for shareholders following previous results disappointments.And in producing figures at the ..."[link]
Hydrogen Economy
07 Mar 2018
Results Well the market likes 'em! Financials look good, but with so much adjustment it is a bit hard to be sure where we are, reported EPS from 220p loss in 2016 to 229p in 17 with 2.6 Bn gain on currency hedges (after 4.4 bn loss last time). The more interesting results were 35% increase in large engine deliveries, 12% increase in widebodied flying hours. Operating problems with Trent 900 and 1000 which cost 170m in 17, expected to DOUBLE in 2018 then peak in 2019, running through to 2022!. Relative to forecast Op Profit and FCF of 400m and 450m (both +-100m) that's an eye-watering screw-up and feels like an ongoing risk.Power Systems reported to be improved under new leadership, results look flat so presumably work in progressIFRS to be adopted in 2018, so 2017 results comparison provided, main impact in Civil Aerospace where current practice of recognition of future revenue and profit from long term agreements will cease, changing 550m profit to a 330m loss, Ouch! I guess it is a non-cash impact so probably not such an issue and an accountant may be able to confirm whether this will effectively defer tax liability which sounds like a good think. The US tax changes looks like it is a big help when RR does get round to reliable profit generation.Interesting comment on increased R&D spend on small modular reactors, unclear how much and chances of success, but would be a big opportunity if successful. No Trent 1000 problems here hopefully!After all the restructuring discussion over the last couple of years, surprised to see employees increased from 49900 to 50000. Hopefully lots more engineers and technical specialists and fewer managers. H2
Hydrogen Economy
04 Mar 2018
Times - RR Management cuts to be announced FY Results due on Wednesday Sunday Times has some comment on what to expect. Key points summarized below.RR certainly needed streamlining, but ultimately it will be the fight for market share which determines success, hopefully the cost cutting will not disrupt development marketing and delivery of world beating products.H2[link] is planing more cuts of management ranks. Warren East has hired consultant Alvarez & Marsal to streamline the company. Since East joined in 2015 about 600 executives and senior managers have left/been cut.East, due to provide strategy update alongside annual results with underlying pbt of £878m last year analysts estimate.East targets increasing annual cash flows from an estimated £129m last year to £1bn by 2020 by when the company is expected to have more than 50% of the market for engines for wide-body aircraft. Last week, East admitted he had underestimated the challenge he faced when he became chief executive. “I didn’t know quite how bad it was. I don’t think anybody did,” he told The Times.“There was an accounting fog. We were reporting profit that looked good but if you looked at the numbers, we hadn’t faced up to the reality of it: a big gap had developed between profit and cash.”
sage in the hills
02 Mar 2018
Thurs and Fri famous words.... Its Trump and Dump ! .....SAGE
II Editor
25 Jan 2018
NEW ARTICLE: Trends and Targets for 26/01/2018 " FTSE FOR FRIDAY (FTSE:UKX) Our 100% success rate over FTSE for FRIDAY movements managed to remain intact last week but we're losing confidence due to the markets frequent inability to match secondary targets. This, often, can be a sign of ..."[link]
Hydrogen Economy
11 Dec 2017
Qatar signs up for 24 Typhoon fighters I think intention announced earlier but sounds like the deal now done. Typhoon uses EJ200 engine made by Eurojet RR has 34.5%. RR has much of the hot end- combustion and HP turbine, so should get plenty of spares business in the future.RR SP could use a boost.[link]
