Good morning. The troubled engineer Rolls Royce has claimed that it is benefiting from “cost reductions and market recovery” as it updates shareholders. The company said that it expected free cash outflow in 2021 to be better than previous guidance of £2 billion as its restructuring programme delivered sustainable savings of more than £1 billion.
Engine flying hours, a key measure of its income, are at about 50 per cent of 2019 levels, compared to the 43 per cent average for the first half of the year.
Warren East, the Rolls-Royce chief executive, said: “We are delivering on the elements within our control. We have achieved good results with our fundamental restructuring programme, as we sustainably reduce costs and deliver a leaner and more efficient company and are firmly on course to complete our disposals programme.”
We’ll have a full story shortly from Robert Lea, industrial editor, on thetimes.co.uk/#section-business.
Investors in the bootmaker Dr Martens and the online card and gift retailer Moonpig have had a rollercoaster ride since they floated earlier this year. Having made its debut at 370p shares in Dr Martens rose to top 500p a share but then erased all those gains and slipped below the float price in October. They closed at 401p last night.
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Shares in Moonpig also soared on their debut, rising from 350p to touch 488p in June. They slipped as low as 285p in October, before rallying to close at 358p yesterday.
Will interim results this morning from both debutantes help to restore confidence?
▉ Moonpig Group has nudged revenue forecasts higher alongside its interim results saying that it expects full-year revenue to be at the top of the present £270 million to £285 million range. The third revenue upgrade this year.
▉ Profits at Dr Martens rose 46 per cent to £61.3 million in the six months to the end of September. Revenue over the period rose 16 per cent to a better-than-expected £369.9 million.
Elsewhere this morning:
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▉ Driven by the opening of new Flannels stores and online growth Frasers has reported that profits rose 75.3 per cent to £186 million, up from £106.1 million, in the six months to October 24. Revenue over the period rose 23.6 per cent to £2.3 billion. Alongside the results the Sports Direct owner reinstated full-year profit guidance, which was scrapped at the height of the Covid-19 pandemic. Frasers expects headline profits of between £300 million and £350 million, which looks to be slightly ahead of City forecasts. We’ll have a full story shortly from Ashley Armstrong, retail editor, on thetimes.co.uk/#section-business.
▉ The discount chain B&M European Value Retail is to pay a £250 million special dividend to shareholders. The 25p-a-share dividend comes after it announced continued strong performance compared to pre-pandemic levels at its interim results last month when pre-tax profits rose 2.4 per cent to £248 million on revenue up 1.2 per cent to £1.1 billion.
▉ Demand for packaging has boosted pre-tax profits at DS Smith by 80 per cent to £175 million in the six months to the end of October on revenue up 16 per cent to £3.36 billion. Miles Roberts, chief executive, said the company has been able to offset higher input cost through higher prices. “This underpins our confidence to deliver a significant improvement in profitability during the second half of this year in line with our expectation,” he said.
▉ The ventilation company Volution, which has been helped by booming demand during the pandemic, has reported that revenues in the four months to November 30 rose 14.6 per cent to £104.0 million year-on-year as it updates shareholders before its annual general meeting.
▉ Others updating this morning include the bus and train operator FirstGroup, the construction company Balfour Beatty and Watches Of Switzerland Group.
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I’ll be on Times Radio just after 4.30pm today to talk through the day’s market action. Listen online, on DAB radio, your smart speaker or via the Times Radio app.
Please do keep sending your thoughts, observations (and corrections) to me at richard.fletcher@thetimes.co.uk and don’t forget to follow me on Twitter @fletcherr.
Richard