Rolls-Royce shares: Is this year’s recovery set to be turbocharged?

• Rolls-Royce shares fell from 116.75p to 111.30p in the last six months
• £1.3bn+ annual cost savings targeted by end of 2022
• Rolls-Royce group hoping to be cash flow positive by H2 2021
• Ready to trade the Rolls-Royce share price? Open an account today

Are Rolls-Royce shares stalling as the aviation industry holds its breath?

The Rolls-Royce share price is up 9.69% in the last month, but remains 4.90% down over the last six months. Such was the steep recovery of Rolls-Royce shares between October and December 2020, it saw the price soar from lows of 38.98p to 134.90p.

However, since the turn of the New Year, Rolls-Royce shares have been rather more subdued. It gave away some of those H2 2020 gains by falling to 91.70p at the end of January 2021.

Since then, the price has been trading within a tight range between 100p and 110p. This is largely due to the uncertainty that remains within the aviation industry, as the travel sector awaits the green light to reopen borders fully. Sales of new aircraft engines have also stalled as airlines seek to optimise their fleets.

Will the luxury brand’s fully electric ‘Silent Shadow’ herald a new era?

Rolls-Royce’s ultra-luxury automotive brand could be one of the shining lights for the business this year. Alongside its recent deal with DHL, the group confirmed last month that it had commenced work on a new fully electric vehicle, which would be available to customers later this decade.

The ‘Silent Shadow’ model, which has been patented already by the German patent office, will be a homage to its Silver Shadow vehicle dating back to the 1960s and 70s. The group’s chief executive, Torsten Müller-Ötvös, believes electrification ‘fits perfectly with Rolls-Royce’ as the brand is ‘not known for roaring loud engines and exhaust noises’.

Rolls-Royce launches the biggest aviation engine testing facility in the world

The Covid-19 pandemic has seen Rolls-Royce pare its engine production, resulting in thousands of job cuts. However, the company is looking to safeguard its world-leading engine production heritage with the unveiling of a new £90m aircraft engine testing facility in Derby.

The FTSE 100-listed group believes the new facility will promote sustainable aviation for decades to come, helping the firm to evaluate the performance of its long-haul passenger aircraft engines. The project, nicknamed ‘Testbed 80’, will help Rolls-Royce to compete with General Electric and Pratt & Whitney at the forefront of the aero-engine manufacturing space.

In the Defence industry, Rolls-Royce is also awaiting the outcome of its tender for the new B-52 engine programme with the US Department of Defence. Meanwhile, the UK government has ring-fenced £2bn of funding for Rolls-Royce’s involvement in a new Future Combat Air System.

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