Rolls-Royce has brought back its dividend since the engineering titan roars back from its pandemic-era crisis.
Tufan Erginbilgic, who took charge in January last yr, said shareholders would receive a payout for the current financial yr price 30-40pc of the FTSE 100 company’s underlying profits.
That’s predicted to amount to about 5-5.5p per share based on the latest forecasts, which were upgraded on Thursday.
Rolls, which makes engines for business aircraft, naval vessels and military jets, has not paid a dividend in five years.
The company, under previous boss Warren East, had a payout planned in 2020 but cancelled it after the coronavirus pandemic shut down international air travel and decimated its funds overnight.
Mr Erginbilgic’s decision to revive the dividend marks one other symbolic moment on the company’s path back to success, after the chief executive – often called “Turbo” by City analysts – launched a top-to-bottom overhaul of the business.
The news sent shares in Rolls rocketing up 11pc in early morning trading to hit a record high.
On Thursday, Mr Erginbilgic said: “Our transformation of Rolls-Royce right right into a high-performing, competitive, resilient and growing business is proceeding with pace and intensity.
“These results and our increased financial resilience give us the arrogance to spice up our 2024 guidance and reinstate shareholder distributions.”
It came as Rolls also upgraded its profit forecast for 2024. In half-year results, the company predicted a full-year underlying operating profit of £2.1bn to £2.3bn, compared with analyst expectations of around £2bn. That’s the figure the dividend shall be based on after taxes and another payables are deducted.
The brand latest goal freed from charge money flow of £2.1-2.2bn will also be up from an earlier prediction of £1.7-1.9bn.
For the first half of 2024, Rolls reported sales of £8.1bn up from £6.9bn a yr earlier. Underlying operating profits, meanwhile, leapt from £673m to £1.2bn.
The company previously reported blockbuster annual ends in February that saw profit margins double and record free money flows.
Under Mr Erginbilgic, Rolls’s share price has risen greater than 400pc and the company’s prized “investment grade” status has been restored by credit standing agencies.