Star fund manager Neil Woodford dumps his remaining Rolls-Royce shares after losing confidence 

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No confidence: Neil Woodford has dumped his remaining shares in Rolls-Royce

Star fund manager Neil Woodford has dumped his remaining shares in engineering giant Rolls-Royce after losing confidence in the engine-maker’s business model.

Rolls has warned investors its profits would fail to meet City expectations five times in the past two years.

In a posting to his Woodford Investment Management firm’s blog, Woodford cited last month’s disappointing trading statement for prompting him to reconsider the Derby-based company, having held its shares in various funds for almost ten years.

Woodford did not say how large his holding was.

But it is estimated to have been around 2.2 per cent of the company’s shares, worth around £232million.

His blog said that investors had become ‘frustrated with the company’s inability to manage expectations effectively’, adding that the company’s downgrades to its profit and cash expectations – and a likely cut to the dividend payment for shareholders – had ‘shaken my confidence’ in Rolls-Royce as an investment. 

Last month Rolls-Royce appealed for investors’ patience and support for its long-term prospects after fledgling chief executive Warren East outlined his plans to steady the embattled FTSE 100 giant.

Rolls – one of Britain’s most important industrial companies – plans to cut up to £200million from its annual costs and will slash 3,600 jobs from its workforce of 54,000, including from among its 2,000 managers.

The firm makes jet engines for airliners such as the Boeing 787 Dreamliner and Airbus A380 super-jumbo, as well as for military aircraft.

Woodford Investment Management had £8.9billion in assets under management at the end of November.

US activist investor ValueAct has recently doubled its stake in Rolls to 10 per cent and is now the company’s largest single shareholder.

It wants a seat on the board but insists it is a long-term investor.