Rolls-Royce soars higher…

FTSE indices experienced choppy trade with a deluge of company news to digest, along with investor reaction to the Federal Reserve’s decisiom to keep its monetary policy unchanged. The FTSE 100 closed -0.44%.

Rolls-Royce drove higher(+13.94%) despite posting a big 1H loss. A £1.8bn net loss was posted, following the revaluation of currency hedges. This non-cash £2.2m mark-to-market adjustment came midyear days after the Brexit vote, as the result prompted Sterling to plunge. This represented a swing from a net profit the year prior of £360m. Sales were reported as falling 1% to £6.5bn, however weaker Sterling proved to be a tailwind for dollar denominated deals. However, investors seemed to
appreciate the turnaround program initiated last year that was reported as delivering results, with saving this year estimated at the top-end of the £30-50m projection. The engine manufacturer is still targeting up to £200m in savings this year.

International Personal Finance(-24.72%) slumped on 1H results as analysts conveyed their disappointment with performance in Mexico. This was as trading profit in the Latin American country fell dramatically in the first half of 2016. Pretax profit came in at £2.3m, a 73% decline from the same time last year. The average loan book grew by 15% but impairments increased by 41%, both at constant exchange rates.

At the close European indices were down as the FTSE 100 closed -0.44%, the Cac 40 -0.59% and the Dax 30 -0.43%.

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