3rd Aug 2023 12:00
(Alliance News) - Rolls-Royce Holdings PLC filled investors with more hope on Thursday with the publication of its interim results, as it appears the firm may be recovering quicker than expected.
Edison Group's Andy Chambers said: "Rolls-Royce appears to be emerging from the clouds with a very strong set of half year results."
Shares in Rolls-Royce were up 4.5% at 192.10 pence each in London on Thursday around midday. It was amongst one of the best FTSE 100 performers of the morning.
Over the last twelve months, the stock has more the doubled from 90.79p.
In the six months to June 30, the London-based maker of power and propulsion systems swung to a pretax profit of GBP1.42 billion from a loss of GBP1.75 billion a year prior, as financing costs were cut to GBP313 million.
Revenue rose by 34% to GBP7.52 billion from GBP5.60 billion the year before. This was driven by higher large engine deliveries, contractual improvements and increased large engine shop visits, Rolls Royce said.
The company did not declare an interim dividend.
Looking ahead, Rolls Royce raised its full-year guidance for underlying operating profit to between GBP1.2 billion and GBP1.4 billion, up from GBP652 million in 2022. It had previously guided for GBP800 million to GBP1.0 billion.
Edison's Chambers said: "The recovery from the dark days of the pandemic years appears to be progressing well and investors may now be able to take a more favourable view of Rolls-Royce’s potential once again."
Meanwhile, Shore Capital's Jamie Murray said the results indicate "that the Rolls turnaround story may be happening at a faster rate than previously expected." He added that he thinks that "several catalysts remain" which could stimulate further upside.
It seems that Rolls-Royce is now a world away from the criticism once levelled at it by Chief Executive Officer Tufan Erginbilgic.
Erginbilgic had described Rolls-Royce as a "burning platform" just days into his stint as CEO. Then in February, Rolls-Royce reported well-received annual results.
On Thursday, Erginbilgic remained somewhat critical. He said: "There is much more to do to deliver better performance and to transform Rolls-Royce into a high performing, competitive, resilient, and growing business."
By Sophie Rose, Alliance News reporter
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