The reasons why Rolls-Royce (RR.) would suffer one of the biggest losses in UK corporate history were widely disseminated in the media prior to the release of its full-year figures. Whether this served to ameliorate any subsequent mark-down is hard to know, but you could certainly argue that the underlying figures provide an even greater source of discomfort for investors than any one-off charges. The question remains: does this set of figures represent the nadir for the beleaguered aerospace giant? With a succession of profit warnings behind it and a seemingly effective restructuring programme under way, the group is well positioned to capture any benefits from an anticipated step-up in the civil aviation market through to the end of 2018.
The bad news: the group plunged to a loss on the back of a £4.4bn write-down on the value of financial hedges taken out against currency fluctuations, together with a recently announced £671m settlement relating to bribery and corruption charges brought against the group by the Serious Fraud Office (SFO), the US Department of Justice, and Brazilian authorities.