The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
When a resolution in the Ukraine is achieved, it wont have much impact - bar slightly lower oil price.
The Fed is much more Hawkish, and the yield curve is now .75% from an inversion = recession coming. I think the markets will be under pressure most of the year. Good time to accumulate RR + give RR time to sort itself out. Need to look our 2/3 years.
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Investors have been unnerved in recent days about the potential for a more hawkish Fed than previously expected. Some are concerned an aggressive interest-rate-hiking cycle, combined with a reversal of the U.S. central bank's bond-buying program, could cause too sharp a slowdown.
A hawkish stance by the Fed, which concludes its latest two-day policy meeting on Wednesday, has pushed up short-term rates, flattening the closely followed yield curve on U.S. Treasuries.
It's not the Ukraine, it's the ceasing of QE, inflation and the prospect of multiple interest rate hikes to bring everything into equilibrium.
This was always going to happen.
1st half results wont be good - but that is known, key is to show progression and a positive outlook. 2nd half was cash flow positive.
I think mixed bag - but with a much stronger outlook than last year.
GP, I think it is because they still have quite a mountain to climb. I expect the results will show that the debt increased last year, despite cost cutting as they only went cash flow positive in the second half. As stated, the ITP sale will go some way to reducing this sale, but possibly this is why 150 can't be justified yet. They have delivered lots of good news, but it has not translated onto the bottom line yet - although it will in due course I'm sure.
I'd guess April/May for ITP and dont think it's priced in in any significant way. I'm unsure on the annual results. In the first half 21, their debt increased (and there is a lot of it). They were cashflow positive in 2nd half. So it is a tale of two parts.
Hopefully they have a much stronger outlook for 22, so possibly get some uplift due to this.
Once ITP goes through, they can show positive cashflow, the ratings agencies upgrade to investment grade it is possible that this gets rerated.
and senior team out in UAE next week promoting SMRs
oh - and although it is stated that "funding is complete" - that's just for this phase, they probably will need double / triple the amount to bring this into production.
I'm more aware of the SMR status than you might think.
For a start Rolls Royce have been funding this since 2016 - so they have sunk a lot of development cash into the project.
Secondly, if you are asking other people to invest, do you think they might do some due diligence on your companies ability to keep going - or are they happy to smack a £100M in there and hope for the best!
It's all interlinked - please read last years annual results which clearly shows the show/mid/long term strategy they are pursuing.
you mean like setting up Rolls Royce SMR? :-)
seems like a good strategy to me, sell off established businesses - and develop new ones which have a higher chance of growing, whilst keeping the core income stream from engines. not sure how much of it was done because of Covid and loss off income revenues, but I think it will work out well for them in the end. They have cut costs with retained businesses as well.
Next news flow on SMRs will be acceptance into the GDA process, March time I estimate. It shouldn't impact share price particularly - but marks another key milestone for the business.
As previously mentioned on here, the next 1-2 years is about balance sheet recovery, get the credit ratings back to allow more institutional investment, re-instate the dividend. But it is a nice thought that around that time the SMR approval process will be well advanced and they might be starting to take on some orders.
Maybe from the Ukrainians as RR met with them on Weds to discuss possibilities.
https://interestingengineering.com/the-worlds-first-small-modular-nuclear-reactor-is-sending-power-to-the-grid
China connected its first small modular nuclear reactor to its power grid, making it the first country in the world to draw power from such a machine
Interesting article - and I just checked, as of end Oct Fidelity do indeed hold 119M RR shares in its tech fund.
What a horrible person - hope the money goes to charity, not him. Besides it was just a bit of fun.
Mind you - wonder what the price will be next Christmas?
85m for 10%
This will be up tomorrow
It's not about the specific red list constituents - more the principle that there really is not much point having a red list at all in the future and perhaps they will think twice next time
Well we are about to find out what Boris thinks at 8.