Rolls-Royce share price: Group seeks government funding for nuclear project

A consortium led by Rolls-Royce Holdings (LON:RR) has asked for more than £200m in government funding to help develop its project for small nuclear reactors, the Financial Times has reported. The news comes after it recently emerged that the British engine maker was also in talks with China’s largest state-backed nuclear company about supplying equipment for a power plant the Chinese group hopes to build in Essex.

Rolls-Royce’s share price fell in the previous session, giving up 0.48 percent to close at 868.80p, underperforming the broader market, with the benchmark FTSE 100 index shedding 0.14 percent lower at 6809.22 points. The group’s shares have added more than four percent to their value over the past year, as compared with about a near 11-percent dip in the Footsie.

Rolls-Royce seeks government funding

The FT reported yesterday that Rolls-Royce and its partners, which include Laing O’Rourke and Arup, wanted to secure a sum ‘in the low hundreds of millions,’ according to a source with a knowledge of the matter. The consortium has applied for funding from the government’s industrial strategy challenge fund under UK Research and Innovation (UKRI), with the money set to enable the partners to develop their design through to the later stages of the ‘generic design assessment’ by the industry regulator.

Industry sources with knowledge of the bid told the newspaper that the consortium had ‘entered detailed negotiations’ with UKRI before Christmas. Rolls-Royce has previously signalled that its reactor would cost about £2.5 billion to build.

Analysts on British engine maker

The 15 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 975.00p on the shares, with a high estimate of 1,250.00p and a low estimate of 765.00p. As of January 26, the consensus forecast amongst 18 polled investment analysts covering the blue-chip group advises investors to hold their position in the company. 

As of 08:18 GMT, Monday, 28 January, Rolls-Royce Holding PLC share price is 868.80p.