Rolls-Royce (RR)

Business description

Rolls-Royce is a global power systems company producing gas turbines, reciprocating engines and nuclear plant for civil aircraft, defence, marine and energy. Revenues split broadly equally between original equipment (53%) and aftermarket services (47%).

Share price chart

Share chart

Stock data

Market cap.£15682.9m
Last close832.00p
High / Low (52 weeks)1258.4p / 779.5p
Stock market listingLN
Forecast net debt (m)N/A
Forecast gearing ratio (%)N/A
TeamIndustrials
SectorAerospace & Defence

Price performance

%1m3m12m
Actual(2.1)(16.7)(31.1)
Relative *2.2(11.5)(29.3)

* % Relative to local index

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Investment summary

Rolls-Royce's 4 November IMS highlighted c £300m of restructuring charges for 2014-15e as the company focuses on those elements of its costs that are within its control; the payback period should be around 2.5 years. 2015 earnings (pre-charges) are now likely to be down by up to 5% (vs previous guidance of flat), with Civil Aerospace margins only really expected to inflect upwards from 2018 onwards. We see the appointment of a new CFO as offering Rolls the opportunity to make a break from its tradition of a relatively defensive relationship with some of its stakeholders, and an approach to accounting that has often appeared opaque or confusing.

Last updated on 01/12/2014

Y/E Dec Revenue (£bn) EBITDA (£bn) PBT (£bn) EPS (fd) (p) P/E (x) P/CF (x)
2012A 12.2 1.2 1.4 57.8 14.4 10.6
2013A 15.5 1.5 1.8 65.1 12.8 6.9
2014E N/A N/A N/A N/A N/A N/A
2015E N/A N/A N/A N/A N/A N/A

Last updated on 27/11/2014

Latest research

Daily comment

Institutional Comment | Aerospace & Defence | 05/11/2014

Daily comment

Institutional Comment | Aerospace & Defence | 24/10/2014

Daily comment

Institutional Comment | Aerospace & Defence | 21/10/2014

A disappointing 2015e, and cautious new medium-term guidance

Institutional Update | Aerospace & Defence | 20/10/2014

Daily comment

Institutional Comment | Aerospace & Defence | 30/09/2014

Daily comment

Institutional Comment | Aerospace & Defence | 17/07/2014

Daily comment

Institutional Comment | Aerospace & Defence | 16/07/2014

Daily comment

Institutional Comment | Aerospace & Defence | 15/07/2014

Moving to 'risk off'

Update | Aerospace & Defence | 15/07/2014

Daily comment

Institutional Comment | Aerospace & Defence | 19/06/2014

Daily comment

Institutional Comment | Aerospace & Defence | 12/06/2014

Daily comment

Institutional Comment | Aerospace & Defence | 11/06/2014

Latest video

Executive Interview - Rolls-Royce

Industry outlook

Rolls' June 2014 Investor Briefing included a clear statement that the company is not looking to make major acquisitions. This lays to rest investor fears that Rolls might return to Wartsila, which could have cost $8bn+. With a strong Trent-based civil engine growth story, Rolls is clearly focused on managing the cash costs of this, underlying operational performance, and preparing for the development of the next generation of narrow-bodied aircraft engines.

Last updated on 01/12/2014

Key management

Ian Davis, Chairman
John Rishton, CEO

Company address

65 Buckingham Gate
London
SW1E 6AT
United Kingdom
+44 (0) 20 7222 9020
View website