FTSE 100

Rolls-Royce share price: what are the latest director deals?

The Rolls-Royce share price (LON: RR) has fallen by 47% in the past year. This compares with a flat performance from the FTSE 100 index (INDEXFTSE: UKX) over the same time period.

In the past three months, there have been several director deals in the shares of the aerospace and defence company. For example, chairman Ian Davies has made three separate purchases of the company’s shares. They were undertaken on 7 December 2020, 7 January 2021 and 7 February 2021. On each occasion, they amounted to a transaction value of around £1,975.

The firm’s non-executive director, Lee Hsien Yang, has also made three purchases of the company’s shares in the past few of months. They were made on the same dates as those of Ian Davies, and amounted to approximately £980 per transaction.

Latest Rolls-Royce share price news

In terms of the latest investor news releases made by Rolls-Royce to the stock market, the company announced on 15 February that Panos Kakoullis has been appointed CFO. He will commence work in that role from 3 May 2021. He previously spent his career at Deloitte.

On 26 January, the firm released a trading update for the 2020 financial year. The company’s operational performance in December across all of its various business units was as per its previous expectations. The mitigating actions it has taken in response to Covid-19 prompted in-year cash cost savings of around £1 billion. Its year-end liquidity stood in excess of £9 billion, which was at the upper end of its previous expectations.

Rolls-Royce discussed the challenging trading conditions that have impacted on its share price in its latest trading update. It noted that even though vaccination rollouts have been encouraging, the near-term outlook for the airline sector remains challenging. As a result, it expects to deliver a free cash outflow of around £2 billion in the 2021 financial year.

The firm is also continuing with its strategy to become more efficient through major cost reductions. For example, it highlighted in its trading update that it has reduced headcount by around 7,000 in the past 12 months as part of attempts to streamline its operations. It intends to make a further 2,000 roles redundant by the end of 2022. The company anticipates that this will help it to deliver on its target of £750 million in free cash flow within the next two financial years.

Investment prospects

Despite the Rolls-Royce share price fall in the past year, the firm trades on a forward price-earnings ratio of 34. This uses analyst consensus forecasts for earnings per share for the 2022 financial year. They are forecasting a loss per share of 1.2p in the current year, and positive earnings per share of 3.3p next year.

The company is due to release its full-year results to the stock market on 11 March 2021.

Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.