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Rolls-Royce (RR) stock falls on renewed uncertainty

By Neil Dennis

09:29, 9 December 2021

Rolls-Royce aero engine
Civil aerospace division faces fresh Covid threats – Photo: Shutterstock

Rolls-Royce (RR) shares fell on Thursday as a broadly positive trading update was overshadowed by continued uncertainty surrounding the travel sector in the face of persistent coronavirus concerns

Shares in the British aero-engine maker fell 3.2% to 124.7p (164.7¢) in early trade on the London Stock Exchange.

Cost savings

The FTSE 100-listed engineering company reported large cost savings from its restructuring programme, improving order intake as the airline industry began to recover, and – as a result – a bumper free cash flow that is “expected to be better than previous guidance of £2bn”.

The fall in share price may suggest investor disappointment that a £2bn windfall from its disposals programme will be used to pay down debt and strengthen the balance sheet rather than being distributed among shareholders.

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External uncertainties

Warren East, chief executive, welcomed the “gradual recovery” in Rolls-Royce’s civil aerospace business but also acknowledged that external uncertainties remained.


16,035.00 Price
+0.470% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8


16,011.40 Price
+0.300% 1D Chg, %
Long position overnight fee -0.0221%
Short position overnight fee -0.0001%
Overnight fee time 22:00 (UTC)
Spread 2.0


35,439.70 Price
+0.250% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 2.2


17,163.10 Price
-1.770% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0044%
Overnight fee time 22:00 (UTC)
Spread 5.0

AJ Bell analyst Danni Hewson told “The outlook for the travel sector, in the context of Covid, looks very uncertain, and any company connected with that industry faces the same uncertainty.”

The performance of its civil aerospace division was the main blot on the trading statement. Installed engine sales and aftermarket activity were both lower than in the previous year, and at the lower end of guidance given at the half-year stage, the company said.

Chris Beauchamp, chief market analyst at IG, said: "The cheery tone of Rolls-Royce’s update this morning has not been matched by the shares, which remain under pressure, having lost 16% over the past month versus a flat performance for the FTSE 100."

Read more: Pound falls on prospect of Covid Plan B

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