Rolls-Royce agrees to sell Bergen, Ferrexpo first-half profits surge

London open

The FTSE 100 is expected to open 32 points higher on Wednesday, having closed up 0.34% on Tuesday at 7,105.72.

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Rolls-Royce has signed an agreement to sell its Bergen Engines medium speed liquid fuel and gas engines business to global engineering group Langley Holdings for an enterprise value of €63m. The deal is part of the aircraft engine-maker’s plan to generate at least £2bn from disposals. Sale proceeds of €70m from the transaction together with €40m of cash currently held within Bergen Engines, which Rolls will keep, will be used to help rebuild the company’s balance sheet.

Ferrexpo reported a 74% rise in revenues in its first half on Wednesday, to $1.35bn, which it said reflected market conditions and investments in increasing pellet quality in the period. The FTSE 250 company said underlying EBITDA was ahead 147% for the six months ended 30 June, at $868m. It recorded a profit after tax for the period of $661m, representing an increase of 165% over the prior year.

Newspaper round-up

Reusing and repairing household goods, from washing machines to phones, and recycling throwaway consumer items such as plastic bottles, could create hundreds of thousands of green jobs across the UK, a think tank has found. The UK creates thousands of tonnes of unnecessary waste each year, some of which is still exported, because of a failure to value resources and invest in the infrastructure needed to re-purpose manufactured goods. - Guardian

Workers feel under pressure to disguise their mental health struggles from colleagues despite feeling less able to cope than they did before the pandemic, according to research released as the government advocates a return to the workplace. About half (51%) of respondents to a survey said they felt under pressure to put on a brave face at work, while four in 10 said they felt less resilient since the Covid crisis struck. - Guardian

Britain has taken a crucial step towards creating a fleet of mini reactors that would reduce reliance on Chinese money and nuclear technology after Rolls-Royce secured investment to build the world’s first production line. A consortium led by the FTSE 100 engineer has secured at least £210m needed to unlock a matching amount of taxpayer funding, which will make it the first “small modular reactors” (SMR) developer to submit its designs to regulators. - Telegraph

Amazon has cut back its Cambridge drone delivery project, shooting down hopes of airborne package drop-offs in the near future. The US technology giant has reportedly slashed up to 100 staff at its Prime Air division, many of them in Cambridge, where the online retailer has been testing unmanned drone deliveries from a secret airfield. - Telegraph

The $40 billion takeover of Britain’s most valuable technology business was thrown into doubt last night amid speculation that the government is thinking of blocking the deal on national security grounds. Last September it was announced that Arm, the Cambridge-based microchip designer, was being sold to Nvidia as part of the American chipmaker’s push to capitalise on the booming market for semiconductors. - The Times

US close

Wall Street stocks closed in positive territory on Tuesday, after a turbulent session in which Covid-19 concerns weighed on reopening plays.

At the close, the Dow Jones Industrial Average was up 0.8% at 35,116.40, as the S&P 500 added 0.82% to 4,423.15 and the Nasdaq Composite was 0.55% firmer at 14,761.30.

The Dow closed 278.24 points higher on Tuesday, despite concerns around slowing economic growth.

In focus earlier in the session, the yield on the benchmark 10-year Treasury note slipped to 1.167% after having almost hit a five-month low on Monday, reflecting concerns about slowing economic growth.

Oil prices also continued on their downward trajectory, with West Texas Intermediate futures dropping below $70.0 per barrel.