Rolls-royce Share Discussion Threads

[hydrogen economy] 06/6/2019 07:58

Looks like a win-win, both Companies can focus on core competence


RNS Number : 2989B
Legal & General Group Plc
06 June 2019

Legal & General announces largest UK bulk annuity with Rolls-Royce UK Pension Fund

Legal & General Group Plc announces that the business ("Legal & General") has written a pension risk transfer ("PRT") transaction in excess of £4.6 billion with the Rolls-Royce UK Pension Fund ("RRPF"), covering approximately 33,000 in-payment pensioners.



This is the largest bulk annuity written in the UK and, including this, Legal & General has now transacted four of the five largest UK PRT deals, namely, British Airways (£4.4 billion), ICI (£3.0 billion) and TRW (£2.5 billion).



Legal & General has a long standing relationship with Rolls-Royce, having provided investment management services to the pension plan since 1989. In 2016, Legal & General issued a £1.1bn buyout for the Vickers Group Pension Scheme. Legal & General will continue to provide investment management services for a significant proportion of RRPF's remaining £8.4 billion asset portfolio following today's transaction.



In aggregate, Legal & General has transacted over £6.2 billion of global PRT year to date (H1 2018: £0.7bn). The financial metrics and Solvency II capital strain of these deals are in line with previous transactions.



Nigel Wilson, Chief Executive, Legal & General, said:

"The Rolls-Royce transaction again demonstrates our extensive strengths and synergies. We have a unique combination of pension, actuarial and structuring expertise coupled with the capacity to create and source long-term direct investments at scale. The global PRT opportunity remains sizeable and compelling: only 8% of the £2.2 trillion of UK DB pension liabilities and 5% of the $3.5 trillion in the US have completed PRT. Our pipeline and appetite for further transactions in H2 remains strong."



Laura Mason, CEO Legal & General Retirement Institutional, said:

"We have developed an excellent relationship over many years with Rolls-Royce, providing both investment and pension de-risking expertise and support. This transaction, which demonstrates the strength and expertise of the Legal & General team, is excellent news for the pension plan and the sponsor. It will provide enhanced security for plan members and the quality customer service for which Legal & General is known."



Liz Airey, Chair of Trustees, Rolls-Royce Pension Fund, said:

"The Trustee is delighted to have achieved this outcome for our members. The transaction will provide greater security and certainty around the retirement benefits our members have been promised. This has been made possible by careful risk management over many years and a strong collaboration between the Trustee, Rolls-Royce and our advisers."

[careful] 30/5/2019 08:34

Perversly the RR. share price could be a play on a no deal Brexit.
Some see Boris and Farage as mere puppets for Trumps America.
he so admires them both.

He can dump cheap food onto our markets and bale our his struggling farmers.
Huge potential privatisation contracts with the NHS which Farage has referred.

But we have Value Act sitting menacingly on the RR. share register.
How the Americans would love to take control of RR.
To say nothing of the other aerospace defence equipment business.

No more Eurofigher (typhoon), Tornado, Jaguar, Concorde...there is a good chance these competing with America programmes could be bought to an end.
How they loathe Airbus.

There is an hidden agenda I suspect, but good for RR. shareholders if American born Boris gets his way.

[pyglet] 29/5/2019 15:01

Is it the 737 MAX 8 causing the fall?

[hydrogen economy] 29/5/2019 14:04

"violated the Childrens ladybird book of aircraft stability principals"

Exactly, changing an existing design which is inherently unstable on take-off is
a) terrible design
b) In no way the same aircraft as the previous stable version so should have been treated as such in certification.

Fixing this with software is only borderline acceptable, but to do such a shoddy job of software and instrumentation design, manuals, training etc is unforgivable.

Knowing all that and knowing 2 aircraft crashed to claim the Max 8 was safe to keep flying should put the decision makers in Boeing and the FAA in serious legal jeopardy.


Modern fighters are unstable but there are only 1 or 2 on board and they do get ejector seats.

[careful] 29/5/2019 11:27

maybe I am being simple minded.
But the original 738 always had its engines too close to the ground, so much so they had to flatten the intake circular cowling at the bottom.
It always looked odd to me.

With the latest geared fan engines with higher bye pass ratios and bigger diameters, they had to do something about the engine position.
They moved them forward, and just looking at it, the engines were no longer pointing slightly down to balance the wing pitching moment as is the norm, but appeared if anything to be pointing up slightly.

This may have solved the obvious ground clearance problem with the large fan, but violated the Childrens ladybird book of aircraft stability principals.
Mighty Boeing doing that? Come come I must be crazy.

'But then we can control unstable aircraft by modern sensors and computer controls, we have to do it with critical unstable fighter aircraft, no problem' we can here them say.

So have we an aircraft that is fundamentally unsound at max power takeoff, but that they think they cn control with sensors?
The cost of structural redesign would be crippling for Boeing.

[dr_smith] 29/5/2019 10:57

Thank-you Hydrogen economy.
When I asked the question, I assumed choice of engines in the industry was the norm, and didn't realise it was this factor alone that in this case that meant the suspect software was at fault.
A few nights ago there was a mysteries tv series on quest and they were looking into a crashed plane from many years ago that seemingly crashed into the sea nose-up and the inferred conclusion was a combination of the computer re-acting incorrectly to a frozen sensor and the pilot not being familiar enough with how the computer works/compensates.
They also concluded that widespread reliance on auto pilot meant pilots were (are now) less familiar with their aircraft when things go wrong, so less able to cope, even if they have been in simulators.

[hydrogen economy] 29/5/2019 09:53

DR_Smith

The video below gives an interesting overview of how the larger engines on the 737-Max 8 affected the design and forced Boeing to add the MCAS system.

What astonishes me is that Boeing could sell the aircraft with a single instrument which had the potential to put it into a highly unsafe condition if it failed or gave a false reading. I work in the oil industry where systematic safety analysis including assessment of the effects of instrument failure is applied. For an instrument which result in multiple fatalities if it failed, a safety integrity level 3 would be applied, typically requiring independent redundant protective systems with voting and fault detection and regular testing.

How Boeing justified a single angle of attack instrument (which to have less than perfect reliability), to initiate an automated system to push the nose down shortly after take-off seems weird. The Video highlights the time pressure Boeing were under to avoid losing market share. For safety critical design that rarely works out well.

hxxps://www.chonday.com/35060/boencrsh7/

[dafrog] 27/5/2019 15:21

Trim tabs.

[dr_smith] 27/5/2019 11:31

Standish11..or anyone.
Not something I have thought about before but...
I assume engines are all different, in terms of size, weight, thrust, centre of gravity, mount points for wing etc, so when Boeing design and test a new plane for handling etc, the test is only good for that model of engine used in the test.
So...how can buyers nominate different engines?

[standish11] 27/5/2019 11:14

Really bad news today as Air NZ have hitherto been such a loyal customer of Rolls:-

Air New Zealand has turned its back on Rolls Royce by selecting General Electric engines to power its new fleet of 787-10s that will replace its 777-200ERs.

In Auckland, this morning Air New Zealand Christopher Luxon announced that the airline would buy 8 787-10s with 12 options powered by GE Aviation’s GEnx-1B engines

Air New Zealand has suffered significant disruptions to its operations over problems with the durability of the Rolls Royce Trent 1000 engines.

[hydrogen economy] 26/5/2019 05:40

Standish,

Thanks for the answer, hopefully correct as it would suggest a recovery should follow, but does show how sensitized the market is to Trent problems.

I was once on a Cathay flight on which 30 minutes out the Captain announced a return to origin as "one of the engines has stopped". At the time I wondered about the chances of common mode failure such as fuel contamination but landed without drama and I conclude the risk of such a common mode failure must be negligible.

A year or so later Cathay flight 780 (A330 with Trent 700) when both engines stopped, one restarting but running uncontrollably at high speed. Pilot was forced to land at dangerously high speed, over 400 kph. Cause later determined to be fuel contamination at Surabya airport (which had just commissioned new fueling system), the particles jamming the main fuel regulator open.

CP seems to be a common factor here and maybe RR (not sure what my flight engine was, quite like RR), but I guess that's just coincidence.

[standish11] 25/5/2019 18:39

The incident this week necessitating the shutdown of a Trent XWB engine on a Cathay Pacific flight from Hong Kong trigered some selling of the shares as people worry that the Trent 1000 problems have started to arise on the XWB engines. The following explanation for the need to shutdown the engine should provide reassurance:-


The crew noticed uneven quantities between the two wing tanks, and saw fuel was venting overboard.

Following the procedures, the engine was shut down as part of the fuel leak checklist to prevent further fuel loss. The engine and components did not fail. Had nothing to do with the 787 engine failure issues.

On the ground a crack was found in the fuel reticulation system between the fuel tank and the engine.

Should be a quick repair once parts arrive.

[hydrogen economy] 25/5/2019 14:00

RR has been one of the hardest hit in the general market decline, down ~6% in the last few days. I don't know what is driving this, I have seen no news. Lower sterling should help and the US China trade war might tip some Chinese airlines to go with RR rather than GE. China is the biggest market so maybe its a worry that the China demand will be hit by a slowing economy.

Long term I think this is a good buy at this price but the near term may throw up more challenges. Getting the Trent issues under control is a pre-requisite for a real recovery, bad news seems to keep dripping out and knocking the enthusiasm out of the stock.

[crossing_the_rubicon] 02/5/2019 17:41

Rolls-Royce settles Trent 1000 engine compensation claims
Chief reassures investors company has contained costs from long-running problems

"We have now settled compensation claims with all airlines to be affected in the next two years,” he told investors, several of whom questioned the company’s handling of the issue.

[wad collector] 02/5/2019 09:14

Trading update

We are today holding our Annual General Meeting. In his update to shareholders, our Chief Executive Warren East will comment: "I am pleased to report that trading is in-line with our expectations. We continue to see a healthy market environment, with strong order intake year-to-date at Power Systems, good flying hour growth in Civil Aerospace and positive order momentum in Defence. The in-service performance of the Trent XWB-84 remains strong and it has been encouraging to see recent order wins for our Trent 1000 engine. Our restructuring programme has continued to make progress as we aim to bring down commercial and administrative costs, improve our engineering efficiency and drive lasting culture change at Rolls-Royce. The completion of our disposal of the Commercial Marine business also represents an important milestone, with proceeds received in April. In summary, we remain on track for the Full Year and to deliver our longer-term aspirations."

For the 2019 Full Year, we remain confident in our underlying operating profit and free cash flow guidance of GBP700m +/- GBP100m. In terms of seasonality, cash flow phasing is expected to have a strong second half bias with higher invoiced engine deliveries and planned inventory reductions in Civil Aerospace.

We continue to implement the fixes to improve the health of the Trent 1000 fleet. Retrofits of the new design of the Intermediate Pressure Compressor (IPC) blade for the Package C variant are underway. Additionally, inspections of Trent 1000 TEN High Pressure Turbine Blades (HPTBs) are progressing and work continues on testing a redesigned HPTB for the Trent 1000 TEN ready for introduction into the fleet in early 2020. Based on our current understanding of the situation and fleet management plan, our guidance for in-service cash costs on the Trent 1000 in 2019 and 2020, as published with our 2018 Full Year Results on 28 February, remains unchanged.

About Rolls-Royce Holdings plc

1. Rolls-Royce pioneers cutting-edge technologies that deliver clean, safe and competitive solutions to meet our planet's vital power needs.

2. Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces, 70 navies, and more than 5,000 power and nuclear customers.

3. Annual underlying revenue was GBP15 billion in 2018, around half of which came from the provision of aftermarket services.

4. In 2018, Rolls-Royce invested GBP1.4 billion on research and development. We also support a global network of 29 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.

5. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills.

[pyglet] 24/4/2019 22:42

Credit Suisse upgrade today Outperform target raised to 1200p

[ayl30] 10/4/2019 07:53

Today's rns seems reassuring, light at the end of the tunnel?

[wad collector] 05/4/2019 17:04

£11 would be nice again!
Just a matter of time really. Patience.

[dafrog] 05/4/2019 06:48

hxxps://ukdefencejournal.org.uk/bell-and-rolls-royce-to-collaborate-on-propulsion-systems/

[standish11] 03/4/2019 19:28

A Jetstar Boeing 787-8, registration VH-VKJ performing flight JQ-15 from Cairns,QL (Australia) to Osaka Kansai (Japan), was descending towards Osaka when the leftt hand engine (GEnx) rolled back for a couple of seconds before recovering. Shortly afterwards the right hand engine rolled back for several tens of seconds and recovered, too. The aircraft continued for a safe landing on Kansai's runway 24R.

The aircraft is still on the ground in Osaka on Apr 2nd 2019, about 103 hours after landing.

On Apr 2nd 2019 Japan's Ministry of Transport reported the occurrence was rated a serious incident and is going to be investigated. Both engines temporarily lost thrust about 90km/50nm south of Oskala. The JTSB have dispatched three investigators on site and opened an investigation (editorial note: however, the JTSB has not yet published such information on their website, standing Apr 2nd 2019).ENDS.

Rolls Royce not alone in having problems with Boeing 787 Dreamliner engines.

[carter633] 02/4/2019 13:23

Despite extremely well documented Trent 1000 engine issues which have plagued the otherwise beloved Boeing 787 Dreamliner program for years, Rolls Royce has the following to say about their new Trent 1000 TEN engine update..."PERFECT TEN. Already the most reliable engine on the Boeing 787 Dreamliner, the Trent 1000 will set the performance bar even higher as the engine's TEN (thrust, efficiency and new technology) development programme moves into its final test stages." – Rolls RoyceThere's just one problem with all that. It hasn't.Today, Singapore Airlines was forced to ground two brand new jets and an additional jet from low cost arm Scoot less than a year after launch, all due to Rolls Royce Trent 1000 TEN engine wear and tear

[wad collector] 22/3/2019 14:24

Presumably the 737 Max problems are good news for RR if more airlines cancel their orders and buy alternatives. The faults will presumably be solved, but passenger confidence is slow to win but fast to lose.
However , if the main alternative is the A320 , then that doesn't help RR either .
So perhaps , it is all irrelevant to RR?