Sector movers: Punishment continues for Rolls-Royce
Rolls-Royce is misfiring again today on further consideration of yesterday's results.
The shares took a pounding Thursday as plans for a 35% increase in the annual shareholder payment and a 13% hike in profits disappointed hard-to-please analysts.
Aero engine giant Rolls said a review of its financial strategy revealed that the overall strength of the business and its future prospects could support such dividend growth.
The final payout goes up 51% to 8.96p per share, making a full year dividend of 13p, better than last year's 9.59p.
"Subject to the group's future financial position and growth in earnings we would expect payments to shareholders to increase progressively," said the group.
It also reported a fall in profit before financing for the year to 31 December 2007 to £512m from £693m, although underlying profit before tax rose 13% to £800m on revenue up 4% to £7.44bn.
The order book grew 76% to a record £45.9bn, with the Asia and Middle East order book more than doubling in 2007 to £20bn.
Increasing material costs, disruption due to facility moves and cost escalation in the external supply chain contributed to a 7% hike in unit costs, although the company hopes this will fall to between 2 and 4%.
Satellite operator Avanti Communications is flying high after entering into a long-term strategic partnership with Inmarsat, which provide satellite control services for Avanti's Hylas satellite, which is due for launch in 2009.
Inmarsat will use its existing network and satellite control centres and up-linking facilities to provide 24 hours per day, 365 days per year monitoring and control of Hylas. Inmarsat already runs a fleet of satellites that cover more than 85% of the globe. No details of the commercial arrangements of the deal were disclosed.
Avanti is building the Hylas satellite in conjunction with the European Space Agency and aims to sell its capacity to telecommunications firms. It is expected to be used for broadband, corporate data networks, video distribution and military/security purposes.
Top performing sectors so far today
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Health Care Equipment & Services 4,007.50 +3.90%
Mobile Telecommunications 3,932.90 +1.73%
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Electricity 7,186.20 +0.97%
Real Estate 3,555.20 +0.93%
Bottom performing sectors so far today
Pharmaceuticals & Biotechnology 6,676.90 -2.53%
Aerospace and Defence 3,167.00 -2.27%
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Fixed Line Telecommunications 3,025.40 -1.74%
Technology Hardware & Equipment 207.50 -1.10%
