Shares in Rolls-Royce Holdings (LON:RR) are in the red this morning even as the company said that trading was in line with expectations. The news comes after the blue-chip engine market suffered a blow earlier this week, getting the UK government’s Prompt Payment Code for having failed to pay suppliers on time.
As of 08:04 BST, Rolls-Royce’s share price had given up 0.48 percent to 911.40p. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.34 percent lower at 7,360.38p.
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Rolls-Royce updates on trading
Rolls-Royce announced in an annual general meeting statement this morning that it remained confident in its underlying operating profit and free cash flow guidance of £700 million +/- £100m. In terms of seasonality, the company expects its cash flow phasing to have a strong second half bias with higher invoiced engine deliveries and planned inventory reductions in Civil Aerospace.
“I am pleased to report that trading is in-line with our expectations,” Rolls-Royce’s chief executive Warren East commented in the statement. “We continue to see a healthy market environment, with strong order intake year-to-date at Power Systems, good flying hour growth in Civil Aerospace and positive order momentum in Defence.”
The company further noted that it continued to implement the fixes to improve the health of the Trent 1000 fleet, pointed out at its guidance for in-service cash costs on the Trent 1000 in 2019 and 2020 disclosed in its full-year results remained unchanged.
Analysts on blue-chip company
Credit Suisse lifted its stance on the British engine maker to ‘outperform’ last week, also hiking its target on the Rolls-Royce share price from 1,065p to 1,200p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 1,051.73p.