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Three Quick Facts: Rolls Royce, Frasers Group and B&M European Retail

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Here are three things you need to know in the financial markets this morning from investment writer, Tony Cross.

#1. Rolls Royce free cash outflow expected to be better than previously guided

Rolls Royce Holding [LON:RR] has published a hotly anticipated trading update this morning, with the company advising that net cash inflows were achieved in the third quarter and that free cash outflow for the full year is now expected to be better than previously guided. Although COVID uncertainties are once again blighting the outlook for the company, especially in its commercial aviation division, it notes strong interest in both power generation and defence sales. The planned policy of asset disposal also continues to run with around £2bn generated so far, money which will be used to pay down net debt.

#2. Frasers Group revenues up 23%

Mike Ashley’s Frasers Group LON:FRAS has published interims for the 26 weeks to 24th October this morning. Group revenues are up 23% on the previous year, helped along by retail reopening, whilst gross margins also ticked 70bps higher. The company notes that the momentum has been continued into H2, although is mindful of an array of macroeconomic headwinds which could take a toll, such as consumer spending being squeezed and the return of COVID-19 restrictions. Assuming no significant lockdowns in the UK however, management have reiterated their guidance for full year adjusted PBT of between £300m and £350m.

#3. B&M European Value Retail announces a special dividend

B&M European Value Retail LON:BME has this morning announced it will be returning £250m to investors by way of a special dividend, payable at 25p per share. The company is now performing well against pre-pandemic comparatives and the board note that they are determined to return surplus cash to shareholders, in line with the capital allocation framework. Shares will go ex-div on 17th December, with payment on 14th January.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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