31st Jul 2025 09:21
(Alliance News) - Rolls-Royce Holdings PLC on Thursday raised its outlook for all of 2025, saying a strong first half showed "our multi-year transformation continues to deliver", despite supply chain difficulties and trade tariffs.
The stock was up 8.3% to 1,070.00 pence early Thursday in London, the top gainer in the FTSE 100 index.
The London-based jet engine and power turbine maker reported pretax profit of GBP4.84 billion, multiplied from GBP1.42 billion a year before.
Pretax profit benefited from a GBP679 million gain on the deconsolidation of Rolls-Royce SMR Ltd, the company's small modular reactor business, which constructs mini nuclear reactors and has brought in outside investors.
Having been selected as the sole provider of the UK's first small modular reactor programme, Rolls-Royce SMR is expected to be profitable and free cash flow positive by 2030, the company said on Thursday.
The bottom line in the first half also was boosted by GBP2.09 billion in net financing income, swung from GBP230 million in net finance costs a year before.
Operating profit, which doesn't include these gains, was GBP2.07 billion, up 26% from GBP1.65 billion, as revenue rose 7.1% to GBP9.49 billion from GBP8.86 billion.
Underlying operating profit was GBP1.73 billion, up 51% from GBP1.15 billion. In response, Rolls-Royce raised its guidance for full-year underlying operating profit to between GBP3.1 billion and GBP3.2 billion. This will be up at least 24% from GBP2.5 billion in 2024.
Rolls-Royce also guided GBP3.0 billion to GBP3.1 billion in free cash flow for 2025, up from GBP2.4 billion in 2024. This was GBP1.58 billion in the first half, up from GBP1.16 billion a year before.
"We see these targets as a milestone, not a destination, with substantial growth prospects beyond the mid-term," Chief Executive Officer Tufan Erginbilgic said of the raised 2025 guidance.
He added: "Our multi-year transformation continues to deliver. Our actions led to strong first half year results, despite the challenges of the supply chain and tariffs. We are continuing to expand the earnings and cash potential of Rolls-Royce."
The company declared an interim dividend of 4.5 pence. Rolls-Royce paid no interim dividend in 2024 but paid a 6.0p final dividend. It also noted that it has completed GBP400 million of its planned GBP1 billion share buyback planned for 2025.
By Tom Waite, Alliance News editor
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