Rolls-Royce investors could be forgiven for being nervous about company’s half-year results after a dismal 18 months since coronavirus struck
Rolls-Royce investors could be forgiven for being nervous about the company’s half-year results, which will come out next Thursday.
The engine maker – which is separate from the car brand – has had a dismal 18 months since Covid struck. It makes the bulk of its money from the number of hours flown by the engines it supplies to large planes that travel on long-distance routes.
And while budget airlines are ramping up their flight schedules to take Britons away on short-haul beach breaks, the recovery for long-haul specialists has been tepid – and is not helped by the US in particular still declining to let British and European tourists enter.
This is more than likely to have continued to hit Rolls’ civil aerospace arm.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: ‘We suspect the division is still under strain as its bread and butter is producing and servicing wide-body aircraft engines – those that primarily power long-haul planes.’
To counter the downturn Rolls raised extra cash and embarked on a huge cost-cutting plan that included slashing 9,000 jobs and selling parts of the business worth £2billion.
It has had some setbacks with these sales but is still aiming to sell Spanish division, ITP Aero.
Hoy added: ‘We’re expecting an update on Rolls’ progress on the disposal of ITP Aero and whether or not it’s on track to deliver on its target of £1.3bn savings per year.’
Shares fell 2.4 per cent, or 2.47p, to 99.71p yesterday.