In today's podcast we talk about Rolls Royce the leading UK aero engine manufacturer and engineering company, last year it raised funds via a rights issue and today it announced a short fall of a further £2billion as a result of the lockdown and rhe continuing impact of the pandemic.
Rolls Royce is paid based on the number of hours its engines are in use, so clearly during this period of disruption its income has been significantly impacted.   The new variant of covid has also extended the period of expected disruption which has again weighed down on the business.
The share price dipped today to around 90p but recovered somewhat in later trading.   The company is seen as a good long term prospect and is supported by Government contracts but a recovery in its share price depends on a return to normal in the aviation industry not just in the UK but worldwide.
Rolls Royce has a number of divisions that includes its Rolls Royce Commercial Aero Engines.
It is therefore likely to be two to three years before normality returns to aviation and Rolls Royce's share price is reacting to the updated news.