Trade tensions cool, Rolls transformation continues, Keywords results underwhelm

“The FTSE 100 starts the week on a positive note as trade tensions between the US and China appear to cool,” says AJ Bell investment director Russ Mould.

Rolls-Royce

“The market appears to welcome the news engineering giant Rolls-Royce is selling off its fuel injection technology business L’Orange for a little over £600m.

“As well as providing a healthy boost to the balance sheet, it suggests chief executive Warren East is not sitting on his hands despite reporting good progress on a transformation of the business at last month’s full year results.

“East has now been in charge at Rolls for more than two years having previously earned a stellar reputation at British technology champion ARM. His successful rehabilitation of a fallen corporate titan is only bolstering that reputation.”

Keywood Studios

“Video game services provider Keywords Studios sees its share price fall despite reporting big increases in revenue and profit in 2017.

“Expectations for these results were sky-high after a bullish trading update in February, the shares already trade on a premium valuation and there are some slight wrinkles in these numbers which could have unnerved investors.

“Gross margin was 1.6% lower, diluted by its $66m acquisition of VMC in October, and operating cash flow was down a touch too.

“The company maintains the rapid pace with acquisitions it has set since joining the stock market in July 2013, separately unveiling two modest deals which give the company its first footprint in music licensing for games.

“Frequent deals can be a red flag for investors, although most of Keywords transactions have been bolt-on rather than dreaded ‘transformational’ purchases which can trip companies up.”

These articles are for information purposes only and are not a personal recommendation or advice.