It would come as no real surprise if, as widely expected, Rolls-Royce cuts its final dividend this week. In July, Warren East had just started as chief executive and the payment was raised by 3 per cent at the halfway stage. The company has made clear the next couple of years are going to be difficult ones, in terms of cashflow and profits.
The latest in a string of profit warnings, in November, held that “shareholder payments policy will be reviewed”, and it was obvious that this was not going to mean an increase.
Rolls-Royce shares have halved since last April, but even at yesterday’s price, off 14p at 515p as the market absorbed the news, they yield 4.5 per cent on the 2014 payment.