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09 Jul 15. Cisco to Invest $1bn in U.K. Digital Growth Over 3-5 Years. Cisco Systems Inc. says it is to invest $1bn in U.K. digital growth over the next three to five years. The commitment will include venture capital equity of $150m for U.K. startups. The company will extend its NetAcademy alongside other investments in education, it said in an e-mailed release. Cisco also plans to create 250 new jobs in the central London area by the end of the year, it said Thursday. The network-equipment maker has often sought large, multifaceted partnerships with governments that are seeking to make better use of the Internet and build up their domestic technology industries. Through such alliances, San Jose, California-based Cisco is able to get its products in front of key government buyers and also obtain early access to promising new technologies. Cisco signed a similar agreement in February with France. By forming partnerships overseas, Cisco is also able to find a way to use its cash held overseas. Any money brought back to the U.S. would incur taxes. (Source: Bloomberg)
06 Jul 15. Rolls-Royce updated its 2015 guidance, including a preview of the expected half-year results, and at the same time identifying a number of market developments in 2015 that are now expected to have a more significant impact in 2016. These primarily relate to Civil Aerospace markets, particularly for our Trent 700 engines during their transition to the new Trent 7000, business and regional jets, and in the offshore markets for our Marine business.
Significant market pressures in 2015 and 2016
* 2015: Civil Aerospace guidance unchanged – Trent 700, business jet and regional aftermarket headwinds offset by higher-than-expected benefits from contract provision releases and widebody aftermarket growth
* 2016: Civil Aerospace net headwinds of around £300m due to Trent 700, business jet and regional jet aftermarket weakness
* 2015 and 2016: Offshore markets continue to weaken, reducing our Marine profit by around £85m in both years
Notwithstanding these expected headwinds we continue to believe that the Group can achieve significant improvements to returns and cash flow, albeit later than previously indicated.
2015 Full Year
Overall, performance for 2015 for the bulk of our business is expected to be broadly in line with previous guidance. However, further deterioration in the offshore market is now expected to impact full year profit for Marine.
Guidance for 2015 revenue is unchanged for the full year. Group underlying profit before tax is now expected to be between £1,325m to £1,475m, compared to previous guidance of £1,400m to £1,550m, reflecting the deterioration in offshore. Free cash flow for 2015 is now expected to be between £(150)m and £150m, compared to previous guidance of between £50m and £350m. Given the weaker near-term cash outlook, we will discontinue the current share buyback programme, having completed £500m of the planned £1bn programme in the first half of the year.
In Civil Aerospace, we continue to expect 2015 underlying revenue and profit within the guided range provided in February of £7,000m to £7,300m and £800m to £900m respectively. However, we now expect the impact of reduced Trent 700 deliveries to be greater than initial estimates, reflecting further adverse developments in the demand for OE and spare engines and related pricing. In addition, lower-than-expected demand for engines to power business jets and a softening regional aftermarket will also adversely impact profit. These market headwinds should be balanced by good growth in our widebody aftermarket and a larger-than-expected benefit from the reversal of a balance sheet provision on the Trent 1000 launch, as a