Rolls Royce In Major Financial Trouble.

[Janus 28]

Engine maker Rolls Royce are falling like a stone. One of their major incomes is revenue from flying hours of aircraft that are fitted with their engines.

Apparently many aircraft are now being put in to storage.

RR are intending to try and raise £2 billion from share holders.

Edited October 1, 2020 by Janus
Typo

[tzijlstra 11]

Rolls Royce, Bombardier, Airbus, British Airways, Ryanair, EasyJet, Thomas Cook (RIP), TUI, Royal Shell, BP, the airports, ferry companies, SME pubs/restaurants/hotels, small shops... they're all about to collapse. 

[nightrider 13]

55 minutes ago, tzijlstra said:

Rolls Royce, Bombardier, Airbus, British Airways, Ryanair, EasyJet, Thomas Cook (RIP), TUI, Royal Shell, BP, the airports, ferry companies, SME pubs/restaurants/hotels, small shops... they're all about to collapse. 

Don’t forget the music industry. Nearly all freelancers who had no support. I know of Classical professionals selling their instruments to buy more time before they run out of money. Also saw article this week in the news that pop musicians have no income and are in trouble. Not to mention lighting people, stage people, roadies etc.

 

A specialist engineering company we use at work has gone under too, leaving us high and dry. Uni got rid of many teaching staff earlier in the year too.

 

I don’t see how we won’t have a huge recession coming and a lot of homelessness.

 

Edited October 3, 2020 by nightrider

[Janus 28]

What a mess eh?

 

There must be a massive hole in the revenue that the government is receiving now from income tax & vat.

 

Big businesses going bust  may well have an effect on private and workplace pensions. What next? A reduced state pension  and also unemployment benefits? 

[Tony 10]

Like almost every firm, they are having to make changes to their business model. If RR are in "major financial trouble" they won't be able to raise the cash. They will so they aren't. 

 

It is a mess though. 

[tinfoilhat 11]

Cineworld going down too.

[Janus 28]

22 hours ago, Tony said:

Like almost every firm, they are having to make changes to their business model. If RR are in "major financial trouble" they won't be able to raise the cash. They will so they aren't. 

 

It is a mess though. 

😂The financial markets have now given the company junk status. 

[Tony 10]

17 minutes ago, Janus said:

😂The financial markets have now given the company junk status. 

That's not what you said though. The rights issue / cash raising will provide the cash to secure the balance sheet which means that the business is not in "major financial trouble". If you're a savvy investor it might be a good time to grab a bargain if you think that RR will still be around in a couple of years, which looks more than likely.

[nightrider 13]

10 minutes ago, Tony said:

That's not what you said though. The rights issue / cash raising will provide the cash to secure the balance sheet which means that the business is not in "major financial trouble". If you're a savvy investor it might be a good time to grab a bargain if you think that RR will still be around in a couple of years, which looks more than likely.

They are involved with our nuclear deterrent. So they will get bailed out eventually if they could not stay afloat. So the business will surely exist. Maybe it will be smaller and be doing less though.

[Tony 10]

For sure. From what little I've read about the RR situation it looks like the government bailout has been averted so that's positive. They, along with P&W,  develop, make and maintain most of the world's jet engines and even if aviation contracts the likelihood of either firm disappearing is negligible.

 

RRs small nuclear plants always seems to be on the cusp of making waves. Perhaps the Covid situation will energise that sector. 

[Janus 28]

There is speculation that RR 'could' be broken up. They are already trying to offload their Marine facilities. 

 

Some of their engine maintenence contracts that have formerly been lucrative, have not made them a profit. They have actually cost them money. This was due to a run on faults.

 

The government has bailed RR out a few years ago. 

Edited October 5, 2020 by Janus

[Mossway 15]

I’m no Ace investor, but I had 332 RR shares in my SIPP and RR had, pre Covid, a big problem with the Trent 1000 engine. I baled out in Aug 2019 and sold at £7-67. per share.  If I’d held on to them they would be worth a total of c £405 today. I wouldn’t touch them now.