Home Business NewsBusiness Rolls-Royce sputters amid tough conditions

Rolls-Royce sputters amid tough conditions

by LLB Reporter
4th Aug 22 10:16 am

For a one-time champion of British engineering, the company is at a pretty low ebb. Today’s results demonstrate the size of the task facing the newly appointed chief executive Tufan Erginbilgic.

If even a well-regarded figure like Warren East, who will hand over to Erginbilgic at the beginning of next year, can’t fix the business then what hope is there for anyone else?

Despite seeing some recovery in the all-important civil aerospace business, Rolls is still left trailing behind expectations.

“The pandemic was clearly a once-in-a-generation shock to the aviation sector which Rolls serves, and it was always going to impact the lucrative spares and repairs revenue, derived from the company’s base of installed engines. These are directly linked to how long aircraft are in the air, so the fewer planes in the sky, the greater the damage to revenue,” said AJ Bell’s Russ Mould.

“However, the company’s problems undoubtedly predate Covid, with the businesses struggling to generate consistent cash flow for years.

“Hopes for a second-half revival could prove forlorn. Given the inflationary pressures and impact from conflict in Ukraine, the incoming CEO may need to find a more dramatic fix for a now rather broken business.”

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