🚀 Rolls-Royce at an all-time high: Strong results, dividend and record free cash flow!
British aerospace and technology giant Rolls-Royce $RR.L has significantly exceeded market expectations for 2024 and reported exceptional profitability growth. The company benefited from strong demand in the aerospace sector, the successful implementation of strategic initiatives and extensive cost-saving measures. 📈Rolls-Royce shares rose by up to 20 % to an all-time high in response to these great results!
📊 Key financial results:
Operating profit: £2.46bn (+54% YoY) vs. £1.59bn in 2023
Revenue: £17.85 billion (+16% y/y) vs. £15.4 billion in 2023
Operating margin: 13.8% vs. 10.3% in 2023
Free cash flow: £2.42bn (+87%) vs. £1.29bn in 2023
Net cash: £475m vs. net debt of £1.95bn in 2023
🚀 Strong liquidity and balance sheet stabilisation has enabled the company to reintroduce a dividend (6 pence per share) after a five-year hiatus and launch a share buyback at a value of £1 billion.
🔎 What's behind the success?
Rolls-Royce, one of the most important manufacturers of aircraft engines for Airbus and Boeing, as well as power and defence systems for naval and nuclear applications, benefited from:
Growing demand in the aerospace and defence sector
Increased service revenues and new contracts
Successful restructuring that reduced costs and improved efficiency
Strong cash flow generation which enabled debt reduction
CEO Tufan Erginbilgic, who described the company two years ago as "a 🔥 burning disaster", transformed Rolls-Royce into one of the most powerful players in the aerospace industry.
🚀 Future outlook and growth drivers:
Medium-term target: increase operating profit to £3.6-3.9 billion
Expansion in the defence segment due to rising military spending by European governments
Investment in small modular nuclear reactors (SMR) as part of the energy strategy
Continued growth in aircraft engines and services
The company has huge potential, unfortunately for entry there would have to be a correction...
Does anyone have shares of this company in their portfolio? Is this company an interesting investment for you?
A great company that I used to have on my watchlist, but somehow I rejected it and I don't know why😂. I guess I'll have to take another look at $RR.L.
I bought a few shares last year and so far I am very happy. The business is working great and if the stock drops at least 20%, I'd be happy to buy in.
I've had $RR.L on my watchlist for a long time, but the stock still looks expensive to me, so I'll wait for a better price.