Rolls-Royce share price rallies ahead of group’s full-year results

British engine maker expected to unveil rise in pre-tax profits

Rolls-Royce share price rallies ahead of group’s full-year results

Shares in Rolls-Royce Holdings (LON:RR) have jumped in London in today’s session, ahead of the British engine maker’s full-year results tomorrow when the company is expected to unveil a rise in profits. Investors, however, will also be eying an upbeat over potential costs for fixing the problematic Trent 1000 engine.

As of 14:23 GMT, Rolls-Royce’s share price had added 2.39 percent to 839.00p. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.82 percent higher at 7,174.33 points.

Group to post rise in profits

Rolls-Royce is scheduled to update investors on its 2017 performance tomorrow and City A.M. reports that according to analysts’ consensus, on an underlying basis, 2017 pre-tax profit is expected to have grown to £878 million last year from £813 million in the prior-year period, while revenue is set to have surged to £14.7 billion from £13.8 billion in 2016. The results will come amid an ongoing restructuring under chief executive Warren East who recently unveiled plans to reduce the group’s five operating businesses to three core units based around Civil Aerospace, Defence and Power Systems. 

“Simplicity is the order of the day at Rolls,” George Salmon, equity analyst at Hargreaves Lansdown pointed out, as quoted by the newswire. “A lack of transparency arguably contributed to a series of profit warnings a few years ago, so we don’t blame CEO Warren East for trying to make things more straightforward.”

Analyst ratings update

The 18 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 887.50p on the shares, with a high estimate of 1,261.00p and a low estimate of 645.00p. As of March 3, the consensus forecast amongst 21 polled investment analysts covering the British engine maker advises investors to hold their position in the company.  

As of 14:56 GMT, Tuesday, 06 March, Rolls-Royce Holding PLC share price is 831.20p.

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