Rolls-Royce raises guidance as profit jumps 46% Proactive uses images sourced from Shutterstock
Rolls-Royce Holdings PLC (LSE:RR.) raised its full-year guidance after first-half operating profit jumped 46%, as improved margins across all three divisions extended the engine maker’s turnaround.
Underlying operating profit increased to £2.5 billion from £1.7 billion a year earlier on revenue up 25% to £11.3 billion. Operating profit margins widened to 22.5% from 19.1%.
The FTSE 100 group now expects underlying operating profit of £4.7-4.9 billion for the full year, alongside free cash flow of £3.8 -4 billion, despite disruption from the conflict in the Middle East.
Free cash flow increased to £2 billion in the first half from £1.6 billion a year ago, helping net cash reach £2.1 billion at the end of June, up from £1.9 billion at the end of December.
Civil Aerospace’s operating margin increased to 25.3% from 24.9%, helped by improved profitability from long-term service agreements and engine maintenance. Defence’s margin rose to 21% from 15.4%, while Power Systems improved to 20.3% from 15.3% following stronger demand from data centres and government customers.
Chief executive Tufan Erginbilgic said: “Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past.”
He added that the company had “effectively eliminated aircraft on ground”, easing disruption for airline customers.
The board declared an interim dividend of 6p a share, up from 4.5p. So far, £1.4 billion of shares have been purchased under its planned £2.5 billion share buyback for the year.