10th Dec 2015 07:01
LONDON (Alliance News) - Fund manager Neil Woodford has sold his remaining shares in Rolls-Royce Holdings PLC, the embattled jet engine and power systems engineer, saying the problems which had been plaguing the company have now spread to its core aerospace business.
In a blog, Woodford said Rolls-Royce has been hit by a number of issues, including the transition over to new engine programmes by large aircraft manufacturers and an order slump which has hammered revenue for its marine business.
But while Woodford had previously been glad to use periods of share price weakness to build up his holding in the company, he said the challenges which had been dragging on the group's military and marine businesses have now spread to the core aerospace arm, resulting in material downgrades to profit and cash expectations.
"This has shaken my confidence in the investment case and so the position has been sold across all mandates," Woodford wrote.
He said the major issue is he has lost confidence in the long-term business model of Rolls-Royce, saying the group's civil aerospace engine business is "pretty opaque and difficult to analyse".
"If our caution is misplaced, we will look to invest again in the business, but for the time being we are happy to stand on the side-lines," Woodford added.
The shares have been sold from the CF Woodford Equity Income Fund and the Woodford Patient Capital Trust PLC, the latter of which is a constituent of the FTSE 250. Woodford didn't state the size of the holding that was sold.
By Sam Unsted; [email protected]; @SamUAtAlliance
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Related Shares:
WPCT.LRolls-Royce