The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Hi Dazpink, not sure what you'd like Mike to keep with? Is that posting misleading statements like defence is up 40% first quarter? It is not helpful when people post misleading facts on this forum when nobody questions them and people who are new to investing believe what people write here. RR. is a great company but c/f and the level of debt are as important as their technology and back orders. There is a reason that a number of city institutions value RR. at below £1 atm. We have got to consider what they say rather that dismissing it out of hand. RR. have great prospects, a good team but have to find a new leader and have to execute on getting their their debt levels down.
ffs Mike, I am a strong believer in rr. but the rosy sunshine, it will never rain bu!!s*** you post day in, day out mate would put off the most ardent investor ... give it a rest ... and where have you got defence up 40% this 1st quarter?
Hi lilo, an alternative view is that world oil consumption is what it is, all that will happen is Russian oil will be diverted to India, China etc at a massive discount (giving those countries even further competitive advantage) and the country’s (deemed acceptable to the West) that currently supply India, China etc will divert their oil supplies to us at a much higher price than they currently get from China etc. ie massive profits for them. There will be a big pickup in o&g investment due to many years of slashed budgets but it will not be as much as we think. The paradigm has changed in that most countries urgently want energy independence and the much move rapid move to nuclear, hydrogen & renewables means the demand for o&g will be significantly reduced in 10 years time. As such producers will be concentrating on squeezing every tiny bit of profit out of existing ageing assets rather than making new long term commitments when the future demand/price is uncertain. Maybe PFC could team up with Rolls Royce to build their new SMR around the world?
Fair deuce CHaigt1 … would love to be as brave as you. Rr. is a great company, my only worry is that it’s a bit like Lloyds bank; shareholders play second fiddle to a government agenda, ie they are more interested in having a prestigious UK company operating on a world stage with amazing Intellectual Property and access to some of the best engineering talent on the planet, creating high paid jobs in the UK … rather than generating big profits for ‘greedy’ shareholders. Also I wouldn’t be surprised if there was another Rights Issue after the IPT sale is complete (providing market conditions are right) as they need serious cash to bring all these new amazing technologies to market. Saying all that, we’ll be all beating off the taxman in a few year with our profits!
Someone on here kindly posted a link to a Rolls Royce presentation/exhibition, one day event at Institute of Engineers, in Westminster today. I attended and found it very informative, so thank you to that person.
As someone technically minded and commercially experienced, I was impressed with the extent of the IP at Rr. and if the thirty plus senior staff there today are anything to go by, the future is very bright for rr. Diverse, bright, capable and excellent communicators.
This event was mainly aimed at Government departments/minsters to explain the breath of industries rr. operate in, their leading edge R&D and their products, some of which are currently world leading. So they weren’t expecting a PI with a thousand questions!
Takeaways
1. the engineering brilliant of rr. across multiple areas was evident but I worry about their ability to convert this into profits for shareholders. As an example, SMR - while they are a ‘first mover’ in Europe and their concept/approach appears sound, they may be at a disadvantage to their American competitors who are offering cheap financial packages (funded by US Gov) as part of their sales process. (perhaps to negate the Chinese proposals to strategically located countries?)
2. they have a number of R&D projects at critical stages that will stop soon if new funding is not forthcoming.
3. While the discussions with the six different divisions/sections were excellent, I was most impressed with Defence and a guy called Richard (there was a very bright girl presenting with him who’s name I can’t remember, but to my shame, she couldn’t get a word in). Richard’s knowledge of his area, Defence was comprehensive but also his understanding of the others divisions. He was commercially attuned to the opportunities in defence and understood the importance of how they relied on other devisions. For me the Defence devision is rr. ‘jewel in the crown’ where there are enormous opportunities and profits! While the erroneous rumours of a BAe takeover were a distraction for investors, if it were a possibility, it should be Rr. buying them!
4. If Britain is to flourish on a world stage independent of the EU, it have got to urgently get behind and back companies like RR. There is a once in a lifetime opportunity here to do something really special with the team and IP Rolls has. If this was an American company or had a Elon Musk type character leading it, the sky would be the limit.
5. In conclusion, while the sp may go down in the short term due to market nervousness, rr. high debt or problems with the IPT sale, I plan to substantially increase my investment over the next few months, to hold for the long term. All this IMO and please dyor
Golly Phil, where did you learn to read a set of accounts? Have you looked at their financial statements? Here’s a link is case you haven’t. Better to go straight to the source imo.
https://www.rolls-royce.com/~/media/Files/R/Rolls-Royce/documents/annual-report/2021/ar2021-financial-statements.pdf