Rolls-Royce share price: Results to show negative cash flow

Jet engine problems to weigh on group’s performance

Rolls-Royce share price: Results to show negative cash flow

Rolls-Royce Holdings’ (LON:RR) results this week are expected to show negative cash flow, The Telegraph reports. The news comes amid ongoing issues with the group’s Trent 1000 engine programme.

Rolls-Royce’s share price closed little changed on Friday, shedding 0.10 percent to close at 994.00p, underperforming the broader UK market, with the benchmark FTSE 100 index adding 38.14 points to close 0.50 percent higher at 7,701.31. The group’s shares have added more than eight percent to their value over the past year, as compared with about a 3.5-percent gain in the Footsie.

Rolls-Royce results preview

Rolls-Royce is scheduled to update investors on its half-year performance on Thursday and The Telegraph reports that the results are expected to show negative free cash flow of £400 million, representing a deterioration on the first half of last year when the group spent £339 million more than it was making. The British engine maker has been bit by issues with its Trent 1000 engine programme and warned earlier this year that it needed to increase the number of inspections, with the move set to result in higher costs.

The newspaper meanwhile reports that analysts at Exane BNP Paribas are predicting first-half revenue of about £3.1 billion, £500 million down on last year, and a small underlying pre-tax loss, compared with a £287-million profit in the prior-year period.

Analyst ratings update

The 16 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 972.50p on the shares, with a high estimate of 1,279.00p and a low estimate of 675.00p. As of July 27, the consensus forecast amongst 20 polled investment analysts covering the blue-chip engine maker advises investors to hold their position in the company.  

As of 08:10 BST, Monday, 30 July, Rolls-Royce Holding PLC share price is 994.00p.

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