Shares of Rolls-Royce surged by over 11% on Thursday, hitting an all-time high, as the company announced a return to dividend payments and an upgraded profit forecast. This positive news followed the release of strong first-half results.
While shares pared back some of their gains slightly, they were still trading 8.8% higher by 8:24 am London time.
The British aerospace and defence giant reported an underlying profit of £1.1 billion ($1.4 billion) for the first six months of the year. Looking ahead, the company is confident enough to predict that this figure will rise to between £2.1 billion and £2.3 billion for the full year 2024, surpassing market expectations.
To further delight investors, Rolls-Royce revealed plans to resume dividends for the entire year 2024, with a starting pay-out ratio of 30% of underlying profit after tax.
CEO Tufan Erginbilgic, who took over in 2023 with the ambitious goal of revitalising the company, attributed the impressive results to the successful implementation of their strategic plans, optimisation initiatives, and cost-saving programmes.
In a statement, he highlighted the company's progress: "Our transformation of Rolls-Royce into a high-performing, competitive, resilient, and growing business is proceeding with pace and intensity. We are expanding the earnings and cash potential of the business in a challenging supply chain environment, which we are proactively managing."
He continued, expressing confidence in the future: "These results and our increased financial resilience give us the confidence to raise our 2024 guidance and reinstate shareholder distributions in respect of the full year 2024 results."
This is a developing story. Please check back for further updates.
