Rolls-Royce civil aerospace sales lower than expected, Frasers Group H1 profits rise

Stocks to watch

Rolls-Royce said annual free cash flow would be better than expected after trading improved but sales at its civil aerospace were lower than forecast.

The FTSE 100 engine maker said it also benefited from a delay to about £300.0m of outflows from 2021 to 2022. As a result, free cash outflow in 2021 was expected to be better than earlier guidance for £2.0bn. Rolls-Royce said defence trading was in line with expectations but civil aerospace engine sales and aftermarket activity were at the low end of guidance.

Sports Direct owner Frasers Group reported a 75% rise in interim profit, driven by the strong reopening of stores after lockdown, new Flannels stores and continued growth in online sales.

Pre-tax profit was £186.0m, up from £106.1m a year ago. The company, owned by Mike Ashley said physical and online sales continued to be strong but sounded a note of caution over cost increases, supply chain issues and potential squeezes on consumer spending power.

Cybersecurity group Avast has agreed to acquire US self-sovereign identity firm Evernym for an undisclosed amount.

Avast said on Thursday that the acquisition was expected to close in mid-December, with the general availability of products based on Evernym's technology set to follow in 2022.

Newspaper round-up

The government is facing growing pressure to relaunch furlough and other emergency financial support schemes after imposing working from home orders in England because of the rapid spread of the Omicron variant of coronavirus. Business leaders and unions warned that failure to provide assistance to companies and their workers in the hardest-hit sectors of the economy risked squandering progress made since the easing of pandemic restrictions earlier this autumn. - Guardian

Rail unions are drawing up plans for a national strike as job cuts loom across the industry. The RMT is preparing to ballot its members for industrial action, with the union anticipating compulsory redundancies are highly probable at train operating companies and Network Rail. Such redundancies would mean 'trains are coming to a halt', the TSSA union said after it failed to get assurances over jobs. - Guardian

The former boss of Lloyds Bank has admitted breaking Covid rules after returning to Switzerland from the UK last week. Antonio Horta-Osorio, who is now chairman at Credit Suisse, travelled to Switzerland on November 28 where he was required to quarantine for ten days. However, he flew to the Iberian peninsula on a private jet just three days later, on December 1. - Telegraph

Mike Ashley spent £2.0m on helicopter and commercial jet flights in the year to April 2020, according to newly published accounts from the billionaire Sports Direct owner's holding company. The bill for his AgustaWestland AW109 helicopter and Dassault Falcon 7X jet were £100,000 higher than in the previous 12 months, according to Companies House filings for Mash Holdings. Mash owns a majority stake in Frasers Group, the listed owner of Sports Direct, House of Fraser and Evans Cycles, among others. - Telegraph

Energy bills could rise to almost £1,900 a year from April as supplier collapses, caused by a decade of regulatory failings, add to the pain of record wholesale prices, a damning report warns. Citizens Advice accuses Ofgem of a "catalogue of errors" that will mean households face paying an extra £94 a year on their energy bills from April to foot the £2.6bn of costs from a wave of supplier failures over the past four months. - The Times

The government and HS2 are on the verge of announcing that a £2.8bn contract for the most prestigious train manufacturing project in the history of Britain's railways is to be awarded to Derby's historic Litchurch Lane works and Hitachi's much newer factory at Newton Aycliffe in Co Durham. The long-awaited contract to produce at least 54 trains that can run at 225 miles per hour, are up to 400 metres long and able to carry more than 1,000 people, is to be awarded to a joint venture between Alstom of France and Hitachi of Japan. - The Times

US close

Wall Street stocks closed higher on Wednesday, with the S&P 500 closing just below its record, as concerns over the economic disruption of the Omicron variant of Covid-19 waned.

At the close, the Dow Jones Industrial Average was up 0.1% at 35,754.75, as the S&P 500 added 0.31% to 4,701.21 and the Nasdaq Composite was ahead 0.64% to 15,786.99.

The Dow closed 35.32 points higher, modestly extending gains recorded on Tuesday.