Rolls-Royce’s share price slumps after record losses revealed
Rolls-Royce’s value slipped below £5bn on Thursday after a disastrous set of first-financial results showed the Derby manufacturer had slumped to record losses.
Trading in Rolls-Royce shares opened 10 points down at 243p this morning and at early afternoon were down almost 19p at 234.5p, valuing the firm at just £4.5bn. Last year the manufacturer had a market capitalisation of £15bn.
However, a mid-afternoon rally saw the firm’s share price bumped up to around 256.5p, up 3.5p on the day.
On Thursday morning, Rolls-Royce posted losses of £5.4bn for the first six months of 2020, after the Covid-19 pandemic demolished the passenger flight sector.
The firm also saw revenues drop by a quarter to £5.8bn during a time which boss Warren East said had “an unprecedented impact” on the civil aviation sector, with fights grounded across the globe.
Rolls said that it has saved £350m in the first half of the year, against a target of £1bn in cuts by the end of 2020, and that over 4,000 jobs have been cut this year so far, with another 5,000 to go before Christmas. The company has taken out a £2bn loan to see it through the rest of the the year.
The company also said it is targeting potential disposals, including its ITP Aero business, along with “other assets”, and that it is “reviewing a range of options” to strengthen its balance sheet.
Meanwhile, Rolls-Royce’s finance chief Stephen Daintith is set to leave the company to join grocery giant Ocado. The Board says it has begun a process to identify and appoint a successor.
On Wednesday, Rolls-Royce also revealed it is set to close its Annesley, Nottinghamshire, plant. The company said it hoped that most staff would be transferred to its Derby site.