Rolls-Royce Holdings (LON:RR) and InterContinental Hotels Group (LON:IHG) have been among today’s UK share prices to watch, drifting lower with investors digesting their respective updates. Tomorrow meanwhile is set to put focus on London-listed asset managers, with both Legal & General (LON:LGEN) and Standard Life Aberdeen (LON:SLA) reporting.
Rolls-Royce and InterContinental fall
Rolls-Royce has been one of this Tuesday’s most prominent blue-chip fallers as it recorded core free cash outflow of £391 million, and said that it had increased the in-service costs for its problematic Trent 1000 engines by a total of about £100 million across the next three years. The engine maker’s chief executive, however, pointed to “further progress across the group in the first half in line with our full year expectations,” and further noted that the company expects “significant improvement in cash in the second half” of the year.
Sharecast quoted analysts at Jefferies as labelling the results ‘satisfactory,’ as they stood by their ‘buy’ recommendation.
“As is often the case, one could pick over the components of working capital, but in terms of what happened in the business, the Trent 1000 remains irritating, but EFHs and OE loss reduction were encouraging. The order intakes in Defence and Power Systems were positive,” the broker pointed out, adding that the full-guidance was reiterated, along with the group’s 2020 free cash flow to exceed £1 billion.
“We find the investment case compelling,” Jefferies concluded. Rolls-Royce’s shares are trading about 2.7-percent in early afternoon trade, as compared with about 0.08-percent rise in Footsie.
Proactive Investors meanwhile quoted Ian Forrest, an investment research analyst at The Share Centre, as pointing out that while ongoing problems with the Trent 1000 engines remained a concern, the broker continued with its ‘buy’ recommendation for investors seeking a balanced return and willing to accept a medium level of risk”.
InterContinental has also been among today’s UK share prices to watch, drifting lower as it reported weak growth on the other side of the Atlantic, with revenue per available room rising 0.1 percent. Revenue in the US meanwhile came in flat, amid tough comparables from hurricane related demand in the prior-year period. The company further pointed to lower revenue in Hong Kong, citing “the ongoing political disputes”.
“We’ve seen some slowdown,” Chief Executive Officer Keith Barr said in an interview on Bloomberg Television. “It’s going to have an impact on business in Hong Kong, but it’s a small proportion of our overall business. Hopefully it will be resolved soon.”
“InterContinental have added another record number of rooms to the portfolio, with the global estate now made up of over 850,000 rooms. That’s certainly impressive, but does of course mean there’s even more rooms to fill,” Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown commented, as quoted by Proactive Investors. “Spending on hotels is one of the first things to be scaled back in the face of economic turbulence – on both a corporate, and personal leisure basis.” InterContinental’s shares are changing hands about one percent lower.
Packaging group Smurfit Kappa (LON:SKG) is also underperforming the market with about a 0.8-percent fall as it disclosed that that one if its subsidiaries had been notified today of a decision from the Italian Competition Authority over a market-wide investigation in Italy against approximately 50 companies which has resulted in fine of about €124 million on the unit.
In smaller London-listed movers, boohoo (LON:BOO) is rallying as it confirmed media speculation that it had made an offer to acquire the online business of Karen Millen and Coast, together with all associated intellectual property rights. The retailer, however, cautioned that the talks may or may not result in an agreement for a transaction. Boohoo’s shares are up by more than three percent.
If you are more interested in stocks and indices on the other side of the Atlantic, check out this week’s Day Trading Stock Picks – US and Canadian Lists, or take a look at this article on Target Areas to Watch, with the S&P 500 having broken through support.
UK share prices to watch on Wednesday
Tomorrow’s corporate calendar features an update from Standard Life Aberdeen (LON:SLA), whose results will come about two years following the merger between Standard Life and Aberdeen Asset Management. The update will follow the group’s settlement with Lloyds Banking Group (LON:LLOY) over an investment management contract which will see the bailed-out lender pay £140 million to the blue-chip asset manager over its move to terminate an asset management contract early.
Legal & General (LON:LGEN) will also be among tomorrow’s UK share prices to watch. The Times reports that the company has racked up another £20.6 million of losses on its venture building pre-fabricated homes.
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