Shares in Rolls-Royce Holdings (LON:RR) have fallen into the red in London this morning even as the company reiterated its profit and cash expectations for the current year. The group further updated investors on its plan to repair some problematic Trent 1000 engines, saying that it was making ‘significant progress’.
As of 08:30 BST, Rolls-Royce’s share price had lost 0.91 percent to 829.20p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.09 percent lower at 7,536.58 points. The engine maker’s shares have added more than one percent to their value over the past year, as compared with a 4.25-percent gain in the Footsie.
Rolls-Royce announced in its annual general meeting statement this morning that the year had started well, with trading in line with the company’s expectations. The group’s chief executive Warren East said that Rolls-Royce had made ‘significant progress’ with new maintenance and repair facilities to enable it to fix its problematic Trent 1000 engines. Earlier this year, the British engine maker warned that it needs to increase the number of inspections of its Trent 1000 engines, with the move resulting in higher costs.
“While the requirement for more regular inspections will lead to higher than previously guided cash costs, in response to this we have reprioritised various items of discretionary spend to mitigate these incremental cash costs,” East said in today’s statement, adding that accordingly, the company was maintaining its profit and cash expectations for 2018.
Analysts on group
The 17 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 900.00p on the shares, with a high estimate of 1,272.00p and a low estimate of 400.00p. As of April 27, the consensus forecast amongst 21 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.