Market report

Rolls-Royce ‘ahead of plan’ | First Group ‘transformed’

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5pm: Markets close lower

Markets were in more subdued mood today following recent gains as Omicron restrictions threaten to stifle the recovery. The FTSE 100 spent the day in the red and closed 15.79 points lower at 7,321.26.

Danni Hewson, AJ Bell financial analyst, said: “There is certainly enough uncertainty around to trouble even those wedded to their rose-tinted specs.

“In London Rollsp-Royce was one of the days big losers despite achieving quicker than expected cost savings as the travel sector finds itself back in the blender and any expansion plans will undoubtedly be shoved back in a drawer.

“By contrast trading updates from Frasers group, Moonpig and packaging company DS Smith were warmly received, all can function if restrictions are increased and indeed the latter should seriously benefit if this Christmas becomes “Clickmas” once again.”


10.30am Hibs sack Ross

Hibernian FC have started the search for a new manager after parting company with Jack Ross just over a week before the Scottish League Cup Final.

Full story here


9am: Omicron restrictions loom over market

The FTSE 100 opened higher but was trading below the early peak at 7,342.41, which was 5.52 points ahead as Omicron restrictions unnerved investors.


7am: Rolls-Royce ‘well-positioned’

Rolls-Royce

Aero engine maker Rolls-Royce said the pace of its restructuring was running ahead of its original plan and its expects to have cut 8,500 jobs by the end of the calendar year.

Chief executive Warren East said: “We are delivering on the elements within our control and are focused on our commitments.

“We have achieved good results with our fundamental restructuring programme, as we sustainably reduce costs and deliver a leaner and more efficient company and are firmly on course to complete our disposals programme.

“While external uncertainties clearly remain, we have seen continued gradual recovery in our Civil Aerospace business, a growing order book in Power Systems and have secured a significant contract win in Defence.

“We are investing in the net zero technologies and solutions that we need across the group to grasp the tremendous commercial opportunity of the global energy transition and drive long-term value.

“This all underpins our strategy of creating a better quality and more balanced business which can deliver significantly improved returns and cash flow into the future.”

The gradual recovery in international flying combined with market recovery in Power Systems and resilience in Defence are driving improvements in trading performance.

The company said the restructuring programme, launched in May 2020, is delivering sustainable cost savings more quickly than initially anticipated, and positions the firm well for the £1.3bn savings target by the end of 2022.

This improved trading performance drove a return to positive free cash flow in the third quarter and reduced the outflow expected in the second half.


7am: FirstGroup ‘transformed’

FirstGroup bus

Transport group FirstGroup claimed it is a “transformed business” after the sale of the three North American divisions, creating a simplified and refocused company focused on UK public transport.

It has substantially strengthened the balance sheet and de-risked legacy liabilities, it said in a half-year statement.

Executive Chairman David Martin said: “We have delivered on our commitment to unlock value. By divesting our North American operations, we have strengthened our financial position, refocused on our market-leading public transport operations in the UK, and returned £500m in value to our shareholders.

“With a well-capitalised balance sheet and an operating model that supports our intention to begin regular dividends to shareholders within the next 12 months, FirstGroup is now a more resilient and flexible business.

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