Rolls-Royce (LSE: RR) shares soared over 17% on Thursday after the company reinstated dividends, unveiled a £1 billion share buyback, and delivered stronger-than-expected annual results. The stock hit a 12-month high of 740.00p, doubling in value over the past year.
Chief Executive Tufan Erginbilgic said the company is moving with “pace and intensity” as it transforms into a “high-performing, competitive, resilient, and growing business.”
Operating profit surged 50% to £2.91 billion, with margins widening to 15.4%. Free cash flow more than doubled to £2.43 billion. Despite an 8.2% dip in pretax profit, Rolls-Royce increased its mid-term targets, now expecting £3.6 billion to £3.9 billion in operating profit by 2028.
A dividend of 6.0p per share, the first since before the pandemic, was declared—exceeding analyst expectations. Rolls-Royce also upgraded its 2025 outlook, projecting £2.7 billion to £2.9 billion in both underlying operating profit and free cash flow, hitting mid-term targets two years ahead of schedule.
With performance improving across all divisions, from civil aerospace to power systems, Rolls-Royce is positioning itself for sustained growth. Erginbilgic called the company’s progress a “milestone, not a destination,” hinting at even greater ambitions beyond 2028.
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