Rolls Royce delivered surprisingly high profits in its H1 results. Though revenues are in decline and below consensus, the cost-cutting efforts implemented in FY20 are paying off, with positive operating profits whereas the market was expecting slightly negative ones. It reiterated its confidence in the mid-term recovery of its civil aviation business with tangible targets.
Companies: Rolls-Royce Holdings plc
Rolls-Royce beats estimates on revenue, but profitability missed expectations. In terms of guidance, the prospects are a tad gloomier than previously thought, resulting in a lower FCF expectation against the consensus for 2021. However, cash generation should improve materially by 2022 as the recovery along with restructuring actions pay off.
Rolls-Royce issued a trading update as of November. The Defence business remained resilient while the situation in civil commercial aerospace was more contrasting. The recovery is still fluid, with a few uncertainties still to overcome in 2021 but visibility in 2022 should be better. Still, we see the cash generation capability of the company will remain under pressure.
Rolls-Royce reported a better-than-expected set of FY19 results, beating expectations on the operating profit and FCF lines. The performance was largely driven by Aerospace. Management reaffirmed its £1bn FCF guidance for 2020. We were given litle detail about the 2019-nCoV outbreak, except an unquantified impact on air traffic growth in the near term. All in all, a good development in H2 19, but uncertainties remain in our view.
Rolls-Royce Holdings (RR. LN, £15.0bn) | IMI (IMI LN, £2.9bn) | John Wood Group (WG. LN, £2.5bn) | Senior (SNR LN, £788m)
Companies: RR/ IMI WG/ SNR
RR’s H1 results were mixed. The charges related to both the ongoing restructuring and Trent 1000 issues remain a drag. Although management confirmed its full year guidance in terms of core operating profit and free cash flow, we stick to our negative view. The benefits are not yet visible and this is likely to remain the case through to 2021.
Rolls Royce reported better than expected FY18 results. Civil Aerospace and Power systems have experienced solid progress. The positive news also came from strong FCF at £641m, above consensus expectations. On the other hand, RR increased its T1000 charges by £236m due to customer disruption costs. RR posted encouraging results but the 2019 outlook is not surprising. We prefer to remain cautious on the stock at this stage.
Rolls Royce reported solid FY results, coming in above expectations in terms of revenues, profit before tax and EPS. The bottom line has actually been supported by lower R&D costs while the gross margin deteriorated due to an unfavourable mix. The group has also seen its FCF strongly improving compared to last year, though remaining well below underlying profit. The outlook looks rather solid in terms of revenue growth, but still under pressure and uncertain in terms of operating margin.
Rolls Royce reported a strong set of H1 results, boosted not only by a rising gross margin level but also by foreign exchange benefits. Organic revenue growth (+6% yoy) was driven by foreign exchange benefits (+5%). Drilling down into more detail shows that revenues from services posted the strongest growth (+8%) while OE revenues grew by 5% organically. The underlying gross margin grew from 16.8% to 18.2%. Profit before financing followed the same trend, rising from €158m to €345m thanks to the
Check out what's been happening in the world of Equity Research this week...
Rolls-Royce’s underlying performance in FY16 was ahead of both its own and market expectations. Media focus on the non-cash £4.4bn headline FX loss is missing what looks to be the basis for optimism. As the civil model starts to move from investment in engines for the A350 and A330neo into the aftermarket delivery phase over the remainder of the decade, we think cash flow is likely to improve, particularly if supported by an eventual recovery in Marine.
Rolls Royce published its FY results with reported figures very different from the underlying ones because of the non-cash impact of the £4.4bn mark-to-market revaluation of derivatives and the £0.7bn charge for financial penalties. Underlying revenues decreased by 2% excluding currency effects, mainly impacted by the Marine activity (-24% vs 2015). The operating margin has been even further impacted and in all activities apart from the nuclear activity. The declining but still positive FCF has
In January 2017, Rolls Royce agreed to pay penalties totalling more than £671m to avoid going to a full trial over allegations of bribery and corruption following a complex investigation by the UK’s Serious Fraud Office. It will be settled by paying £497.3m to the UK authorities, $169.9m to the US Department of Justice and $25.6m to Brazil. Intermediaries acting on behalf of RR were accused of making improper payments and gifts to secure deals for engines for civil and military aircraft and for
Rolls-Royce revealed during its capital market day a mixed performance and outlook in the short term, while estimating a negative FCF for FY 2016. It also gave details on the impact of the IFRS 15 new standards which set new revenue recognition rules.
Rolls-Royce released what can only be considered a poor set of H1 results however this had already been flagged by management with profits expected over the course of H2. Revenues and profits were down across all divisions (revenues down 5% to £6.14bn and profits before financing and tax down 70% to £158m) with continued particular weakness in Marine (revenues down 25% and loss-making half year) and a 91% fall in Aerospace profits on only a 5% decrease in revenues due to the product mix effect.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rolls-Royce Holdings plc.
We currently have 63 research reports from 8
Time to take notice
Companies: Somero Enterprises, Inc.
AFC Energy has announced that its “S” Series hydrogen fuel cell system and ammonia cracker have been selected for the Norwegian ZeroCoaster bulk cargo ship design. The proposal has also been awarded “Approval in Principle” status by DNV, the international certification agency. The announcement is another significant endorsement of AFC Energy’s technology and the group’s biggest step forward in Maritime. This is further endorsement of our investment thesis, which was refreshed in September, which
Companies: AFC Energy plc
Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
Strong progress from Spectra Systems Corporation (Spectra), combined with emerging opportunities that were highlighted in the company's recent H1 results, mean we are now able to provide firm forecasts on a five-year basis, a virtually unprecedented state of affairs not just for Spectra but for any quoted growth company. The new forecasts are progressive and substantial, suggesting Spectra will generate a £35m-plus aggregate PBT during 2021E-2025E. We do not view these forecasts as speculative,
Companies: Spectra Systems Corporation
The group has announced a further positive trading update ahead of its December year end, with robust trading in North America by strong demand for new warehousing, with European and Australian operations also seeing strong conditions. As a result, it is raising its FY21 revenue guidance by 8%, with EBITDA raised 7.2%. It also has increased its year-end cash balance to $39.0m, which boosts dividend prospects. We upgrade our forecasts in line with guidance and also increase our FY22 dividend by 8
High quality UK listed proprietary consumer goods business UP Global Sourcing ("UP") has announced that Chris Dent will become the Group's new Chief Financial Officer "(CFO"), replacing Graham Screawn who retires from the Company in CY22.
Companies: Up Global Sourcing Holdings PLC
Fulcrum has delivered a reassuring trading update, confirming it continues to trade in-line with FY22E forecasts, as evidenced by disclosed headline interim results. This comes despite recent turbulence in the UK's energy marketplace, which has not impacted Fulcrum's progress, including its recently established smart metering business. Given a 22% decline in the shares this month, opportunistic buyers should see value as forecasts remain unchanged and the stock now trades at book value and a his
Companies: Fulcrum Utility Services Ltd
No joiners today
No leavers today
What’s cooking in the IPO kitchen?
Trinistar Liverpool S.a r.L announces its potential listing of a newly formed single asset company which will own the Capital Building in Liverpool on the IPSX. Upon admission the Company would become a real estate investment trust (REIT). The Capital Building occupies close to a 3.5 acre freehold site in the centre of Liverpool’s business district; the building comprises c425,000 square feet of predominantly of
Companies: ADBE ADBE SYM ARC AVCT CMCL CLIN DCTA FRAN OSI
Powerhouse has seen early benefits from the agreement signed with HUI in October with this progress on a new project site in Bulgaria. Details have still to be agreed but we see the project as an example of further international demand for the company’s waste to hydrogen technology.
Companies: Powerhouse Energy Group PLC
Companies: ITM Power PLC
i(x) Net Zero, the investing company which focusses on Energy Transition and Sustainability in the Built Environment, announces its intention to join AIM. Following Admission, the Company intends to use the net proceeds of the proposed Fundraising to provide development and expansion capital to certain of its investee companies, for future investments in companies that fall primarily within its areas of interest in Energy Transition and Sustainability in the Built Environment and to provide work
Companies: TGN AFC COIN COIN HL/ OMI
Spectra Systems is a leading provider of advanced technology solutions for banknote and product authentication markets. Spectra's newest customer (announced September 2021), using its optical materials in K-cups for Keurig brewers, has already placed three orders totalling $394,000 since inception (three months sales) and thus evidences the traction Spectra is making in this niche but important growth market. Based on the order pattern to-date, Spectra estimates that this business stream (all cu
A stellar financial performance in the first half shows Brickability at its best, delivering growth from organic and acquisition sources, gaining share and strategically, and importantly, continuing to diversify and de-risk the business by broadening its product ranges and customer depth. Whilst the half has been an extraordinarily favourable one in comparative terms and our instinct is to believe that forecasts can be beaten going forwards in both the short and medium-term from the enhanced pla
Companies: Brickability Group PLC
Windward (WNWD.L) has joined AIM. Windward is a leading predictive intelligence company, fusing artificial intelligence (AI) and maritime expertise seeking to digitalise the global maritime industry. As at 30 September 2021, the Company had 120 permanent employees and had an annual contract value of US$19.7m, with 99 per cent. of the revenue being subscription based. The Placing raised gross proceeds of £26.3m (US$35m) of new capital for the Company and £8.2m (US$10.9m) for certain exist
Companies: SPSY MMH KEFI BRSD IKA SEMP
LTHM announced exceptional results for H1F22 ended 30 September 2021. H1F22 revenue reached £193.9m, +81.2% over H1F21 of £107m. This is notably a stellar first half driven by demand-supply imbalances in global markets that have resulted following the pandemic. Resulting PAT of £26.6m translates to EPS of £1.335 vs. £0.256 in H1F21.
Companies: James Latham Plc