Not so fancy? Rolls Royce to return $1.7 billion to investors
Rolls-Royce shares jumped 7 percent on Thursday after the British aero-engine maker decided to buy back shares worth 1 billion pounds ($1.69 billion) instead of making any major acquisitions.
Rolls-Royce shares jumped 7 percent on Thursday after the British aero-engine maker decided to buy back shares worth 1 billion pounds ($1.69 billion) instead of making any major acquisitions. The company said it was on track to return to earnings growth next year, reassuring investors whose confidence was shaken by a cut in profit guidance in February and an engine order cancellation this month. Rolls-Royce shares climbed to 1,076 pence, their highest in over two months, leading Britain’s benchmark FTSE 100 index . The stock had lost 17 percent of its value over the past six months. The buyback, equivalent to about 5 percent of the Rolls-Royce’s 19-billion-pound market capitalization, will be funded partly by proceeds from the 785-million-pound disposal of its gas turbine unit to German conglomerate Siemens AG, agreed in May. “As no material acquisitions are planned, and reflecting the strength of our balance sheet, we will return the proceeds of the energy sale to our shareholders,” Chief Executive John Rishton said ahead of an investor day event on Thursday.
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