Rolls-Royce Holdings (LON:RR) has been suspended from the UK government’s Prompt Payment Code (PPC) for having failed to pay suppliers on time, the company has disclosed. The news comes as the British engine maker prepares to hold its annual general meeting on Thursday, May 2.
Rolls-Royce’s share price, however, has been steady in London in today’s session, having gained 0.74 percent to 922.80p as of 13:46 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.17 percent higher at 7,440.61 points. The group’s shares have added more than 11 percent to their value over the past year, as compared with less than a one-percent drop in the Footsie.
Rolls-Royce suspended from PPC
Rolls-Royce announced in a statement today that it had been suspended from the UK government’s PPC, administered by the Chartered Institute of Credit Management. The move came as the company failed to pay at least 95 percent of its supplier invoices within 60 days.
“The significant volume of invoices we receive from our large suppliers – and the removal of the consideration of our preferential treatment for smaller suppliers – has pushed us below the compliance criteria as it is now being assessed,” the engine maker explained in the statement, adding that it looked forward to working with CICM and the PPC board “to assist them in gaining a clearer understanding of the way in which we differentiate between large suppliers and smaller suppliers”.
Analysts on FTSE 100 company
The 16 analysts offering 12-month targets for the Rolls-Royce share price for the Financial Times have a median target of 1,095.00p on the shares, with a high estimate of 1,284.00p and a low estimate of 760.00p. According to MarketBeat, the blue-chip engine maker currently has a consensus ‘buy’ rating and an average valuation of 1,051.73p.