Financial Headwinds

To issue just one or two profit warnings is worrying enough, but when a company issues five profit warnings within the space just of two years, it clearly has some problems. It is significant that this company is Rolls-Royce, a global blue chip player in the aero-engine market. Since 2014, the company has lost substantial shareholder value; its dividends have been slashed and its production cost base has remained too high for too long. Parts of its business may now be sold-off too. There have been suggestions that sectors of this engineering group may be forced into an arranged corporate marriage with a competitor. Rolls-Royce's 2015 preliminary results might have been marginally better than some analysts expected, but there remain unresolved financial troubles that have been made worse by poor strategic decisions.