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ROLLS ROYCE FALLS 3% ON QATARI INVESTMENT IN SMALL NUCLEAR BUSINESS

  https://www.asktraders.com/analysis/rolls-royce-falls-3-on-qatari-investment-in-small-nuclear-business/ 22 Dec 21,

• Rolls Royce Holding PLC (LON: RR) has fallen 3% on news of the Qatari investment into the small nuclear reactor business
• It may well not be the investment itself that is the catalyst for the price change but Omicron
• The £85 million Qatar investment isn’t really a material number for Rolls Royce, even as it’s a vote of confidence in the programme.

Rolls Royce shares have continued their recent decline even as the news comes through of a Qatari investment in the small nuclear reactor programme. This could be seen as a surprise – investment in such a programme is likely to be a good deal for Rolls Royce after all. On the other hand, £85 million, the size of the investment, isn’t a large number compared to Rolls Royce – it’s not, as they say, a material number.

The likelihood is therefore that it is wider events driving the Rolls Royce share price, Omicron continues to rage around the world, air travel becomes increasingly restricted and so on. It’s worth pointing out that the RR incomes do not depend, particularly, on actually selling engines to people. There are fees involved in that, most certainly, but there’s an element of selling razors in how the business work. Once you’ve sold someone a razor then you’ve a capitve market for razor blades. Once you’ve got an engine in an aircraft then there’s a decades-long maintenance and repair income flow. That Rolls Royce income stream though depends upon hours in the air – exactly the thing being depressed by Omicron.   

Rolls Royce shares have continued their recent decline even as the news comes through of a Qatari investment in the small nuclear reactor programme. This could be seen as a surprise – investment in such a programme is likely to be a good deal for Rolls Royce after all. On the other hand, £85 million, the size of the investment, isn’t a large number compared to Rolls Royce – it’s not, as they say, a material number.

The likelihood is therefore that it is wider events driving the Rolls Royce share price, Omicron continues to rage around the world, air travel becomes increasingly restricted and so on. It’s worth pointing out that the RR incomes do not depend, particularly, on actually selling engines to people. There are fees involved in that, most certainly, but there’s an element of selling razors in how the business work. Once you’ve sold someone a razor then you’ve a capitve market for razor blades. Once you’ve got an engine in an aircraft then there’s a decades-long maintenance and repair income flow. That Rolls Royce income stream though depends upon hours in the air – exactly the thing being depressed by Omicron.  https://www.asktraders.com/analysis/rolls-royce-falls-3-on-qatari-investment-in-small-nuclear-business/

December 24, 2021 - Posted by Christina Macpherson | business and costs, Small Modular Nuclear Reactors, UK