LONDON (AFX) - Rolls-Royce PLC said it has been awarded a contract worth
some 60 mln stg from The Ministry of Defence (MOD), to provide service support
for the Gnome engine which powers the MOD's fleet of Sea King helicopters.
The initial five-year contract will deliver cost of ownership benefits
consistent with the MOD Defence Logistics Organisation (DLO) objective of
achieving a 20 pct reduction by 2006.
Under the terms of the contract, Rolls-Royce is the prime contractor for all
depot repair and overhaul activity, to include responsibility for spares
provisioning, inventory management, technical and logistics support, said the
company.
In order to deliver sustained cost of ownership, Rolls-Royce has committed
to significantly improve repair turnaround times and engine reliability, it
said.
Rolls-Royce will undertake repair and overhaul work at its facilities at
Ansty, England and Oberursel, Germany, in addition to the Defence Aviation
Repair Agency (DARA) facility at Fleetlands, England, it added.

Rolls-Royce not considering rights issue-source
LONDON, Feb 11 (Reuters) - British aerospace and engineering company Rolls-Royce is not considering a rights issue, despite talk it would call for more cash as it struggles against an aviation industry slump, a person close to the firm said on Tuesday.

The rumours have been circulating since before January but there has been no rights issue or profit warning.

Rolls-Royce declined to comment on talk of a rights issue before its March 4 results but a spokesman said: "This is a rumour which traditionally circulates in the closed period ahead of our results."

The stock fell to its lowest level in more than a decade on Monday, but was trading up 2.66 percent at 87 pence by around

LONDON (AFX) - Rolls-Royce PLC said it has been awarded business worth more
than 150 mln usd in two contracts placed by undisclosed military customers,
covering engine spares and services.
The contracts are part of Rolls-Royce's Mission Ready Management Solutions
initiative devised to increase the level of customer service and maximise the
aftermarket opportunities, Rolls-Royce said.
John Boughton Rolls-Royce Defence Aerospace director of marketing and sales
said: "Rolls-Royce is actively engaging with customers to determine how
in-service engines can be best managed reliably at the lowest cost, reducing
customer expenditure on maintenance, increasing availability and providing more
effective, long-term budget visibility."
The company said a similar contract with the UK's Royal Air Force for their
Spey engines for the Nimrod MR2 aircraft has resulted in increased engine
reliability and reduced turnaround time.

I see in today's ST that RR is in line for a US Navy engine contract for new destroyers, worth 1 billion dollars. Now that would be nice. Might even inspire a little confidence. I shall await an announcement with bated breath, of course, it could be a bit of a downer if it goes elsewhere.

LONDON (AFX) - Rolls-Royce PLC said it has won a 160 mln usd long-term
services agreement with Hong Kong's Dragonair for maintenance of the Trent 700
engines which power the airline's fleet of Airbus A330s.
The TotalCare package, based on agreed rates per flying hour, covers five
A330-300 twinjets.
Dragonair general manager engineering, David Lui, said: "TotalCare gives
Dragonair a high degree of budgeting visibility and places the care of our
engines in the hands of the original manufacturer."
Maintenance of Dragonair's engines will be carried out at Hong Kong Aero
Engine Services Ltd (HAESL), a joint venture involving Rolls-Royce, HAECO and
Singapore Airlines Engineering Company.

Heading the FTSE risers today @ plus 6.2%


I used to swing trade these a while back .... Times comment doesn't help



February 18, 2003

Tempus by Russell Hotten

City remains jittery over Rolls



THE background noise ahead of Rolls-Royces prelims next month is getting louder by the week, an indication of just how jittery the City has become about this stock. The shares have been hitting record lows for many weeks after a string of negative stories about its finances. Add to this the general economic gloom in the aerospace industry, and it is clear that Rolls shares should be handled with caution.
The impetus behind the more recent falls in the shares has been rumours of a rights issue. Rolls has done as much as it is able, given that the company is in its closed period, to steer people away from anything immediate. Yet, there is certainly a feeling in the markets that the company needs to raise some money, if not sooner, then later. Fears that a rights price could be as low as 60p (raising about 1 billion) have put a spotlight on just how serious the problem could be. It should be pointed out, though, that Rolls has an unused credit facility of 1.4 billion.

Another reason why there may not be any imminent cash call is that the company has a new finance director, Andrew Shilston, who quite reasonably would want time to get his feet under the table before making a decision. However, as market bears like to point out, new finance directors at troubled companies often uncover unpleasant things. Should this turn out to be a far worse problem with the pension fund liabilities, then expect the shares to be driven lower.

Rolls, expected to report net debt of about 1.2 billion, had a pension fund shortfall of 700 million at the last count. The company is valued at less than 1.5 billion. With the stock market continuing to fall, the pension problem is not going away. Standard & Poors may well cut its rating on Rolls because of this, though a modest downgrade may raise interest payments by no more than 1 millon. Last August Rolls was indicating that it might need to plug the pension hole by about 35 million this year. Analysts say that figure could now be closer to 60 million, a big dent in profits.

Rolls has got into this predicament largely because of the continuing downturn in the civil aerospace market. Although the company is a defence business as well, on balance it is likely to be hit harder by the impact that a war in Iraq will have on commercial aviation. Rolls is fond of trumpeting its huge order book, but converting this into higher earnings has never been easy. With Rolls, there are just far too many uncertainties. Avoid.

Is something up? Seems to be a lot of buyers around.

This one has a strong positive chart trend (now nearing the top of the channel. Could pull back a little and then surge again as it is FTSE100 bound at the next reshuffle which might explain the action yesterday.

60P coming soon do not say you were not told