In a market receiving a Federal Reserve-inspired boost,
The aero-engine maker unveiled a £1bn share buyback using the proceeds of recent disposals, since it had no acquisitions on the horizons. It had been linked with a bid for Finnish rival
As no material acquisitions are planned, and reflecting the strength of our balance sheet, we will return the proceeds of the energy sale to our shareholders.
The company has agreed to sell its gas turbine business to
Rolls has been under pressure recently after a surprise profit warning in February due to European and US spending cuts, followed by news that Emirates had cancelled a major
But along with the share buyback, the company said it was on track to meet guidance for the year and would cut capital expenditure over the next few years.
The news has sent its shares 63p or more than 6% higher to £10.73. Analyst
The £1bn share buyback, that no large M&A is in the pipeline and confirmation of guidance for 2014 (flat revenues and profits) and 2015 (growth in revenues and profits) show that management have taken on board concerns raised by investors in recent months and suggest Rolls will pursue its strategy to become a diversified industrial more organically and less via M&A. We believe today's [announcement] and the Capital Markets Day are likely to boost confidence in management and drive the share price. Buy.
The Federal Reserve's monetary policy statement pleased both equity and bondholders in the US, with Fed Chair
Still, there is some nervousness among investors given the increasingly troubling violence in
Only four shares in the
Most Popular Stories
- Homeowners More Satisfied With Mortgage Servicers
- Discounts Help U.S. Auto Sales Sizzle in July
- Russia, Ukraine Now Face Off Over Football Clubs
- Colorado Issuing Immigrant Driver's Licenses
- Fiat Looks Abroad After Chrysler Merger Vote
- Chrysler U.S. Sales in July Hit 9-Year High
- MassMutual Teams Up With ALPFA
- Recruiting and Keeping the Perfect Employee
- Obama Vows to Veto House Immigration Bill
- Dow Wipes Out Gains for the Year: What Happens Now?