Shares in Rolls-Royce wobbled after the engineering giant’s largest investor attacked its management.
Jonathan Eng, portfolio manager at American firm Causeway Capital, said he would urge incoming chairman Anita Frew to consider shaking up the plane engine maker’s top team.
Los Angeles-based Causeway has built up its stake to around 9pc, suggesting it is bedding in for the long-haul. It comes a year another American activist investor, Value Act Capital, ditched its holding.
Shares in Rolls-Royce wobbled after the engineering giant’s largest investor attacked its management
Eng said he will be asking Frew: ‘Do we have the right people now that will ask questions when sticky situations come up, because they will come up?’
Frew takes over from chairman Sir Ian Davis in October, giving the management a bit of time to prepare a case. Though Eng did not name names, chief executive Warren East is likely to be feeling the pressure.
Rolls is the most prestigious British engineering group but it had been struggling for years with a bloated middle management and unsuccessful restructurings. To respond to Covid, which wiped out its major source of income maintaining plane engines, East last year launched a third turnaround programme in five years.
It is taking its time to pay off though plans to sell £2bn of businesses have made progress Rolls fell 1.6pc, or 1.88p, to 114.86p, as investors digested Eng’s comments, made on Monday.
Worries are rising about whether international travel will be hit by the spread of the Delta variant, heightened by the EU move to restrict travel from the US. British Airways owner IAG fell 2.5pc, or 4.16p, to 159.36p
Another engineer, mining specialist Weir, made gains following an upgrade from brokers at Peel Hunt. Analysts moved its rating to ‘buy’ from ‘hold’ and upped the target price on the 150-year-old company’s stock to 2250p, a whopping jump from the previous guidance of 860p.
They said a recent drop in the price provides a ‘great opportunity’ and that it was a consistently good performer. It rose 3.8pc, or 64p, to 1751.5p. Airline stocks dragged on the wider market.
STOCK WATCH: Renalytix
Diagnostics group Renalytix shot higher after it added an industry veteran to its board. The US company makes artificial intelligence technology that can identify which diabetic kidney disease patients will be most at risk of developing a serious form of the illness or even kidney failure. Daniel Levangie, who has extensive experience in medical devices and investment firms, joins as Renalytix tries to grow rapidly in the US. Shares in Renalytix, which is included in the AIM100 index of the biggest firms on the junior market, jumped 14.1pc, or 130p, to 1050p.
The Footsie fell 0.4pc, or 28.31 points, to 7119.70, though the FTSE250 rose 0.18pc, or 42.47 points, to 24,102.19. Worries are rising about whether international travel will be hit by the spread of the Delta variant, heightened by the EU move to restrict travel from the US.
This put a dampener on an upbeat outlook from Ryanair boss Michael O’Leary, who predicted a ‘strong recovery’ and that it will return to pre-Covid passenger numbers by October – if there are no pandemic-related setbacks. The airline ran at about 80pc capacity in August and expects to be at 90pc in September. O’Leary said it was even considering adding Boeing planes to its fleet.
This sentiment was shared by Jet2, which yesterday placed its first order for Airbus planes, buying 36. British Airways owner IAG fell 2.5pc, or 4.16p, to 159.36p, Wizz Air by 2.5pc, or 125p, to 4860p, Easyjet by 1.6pc, or 13p, to 796p, while Ryanair fell 2.8pc, or 46 cents, to 15.86 euros, and Jet2 by 0.7pc, or 7.5p, to 1154p despite their news. Oil prices also lagged on concerns about the Delta strain and a meeting of the Opec+ oil cartel today.
Some ministers have indicated the group, which includes countries such as Kuwait, Saudi Arabia and Russia, could increase production further, risking a glut of oil. Brent crude fell 0.6pc to $73 a barrel, sealing its worst month so far this year in August. Renewable power infrastructure investor Trig (down 2.2pc, or 2.8p, to 125.8p) announced plans to sell more shares to investors to pay down debt and fund a potential takeover of some solar energy assets.
They will be priced at 124p and around 195m have already been sold so far. AIM-listed Futura Medical rose 5pc, or 1.9p, to 40p, after it signed a deal to sell its fast-acting erectile dysfunction gel in Mexico and Brazil. Latin American group M8 will distribute the gel.