Rolls-Royce has announced that it will return £1.5 billion to shareholders, marking its first dividend payment since the onset of the coronavirus pandemic. This move comes as the British jet engine manufacturer, a constituent of the FTSE 100, reported a 55% increase in underlying operating profits for 2024, reaching £2.5 billion, and upgraded its future earnings guidance.

In its latest financial year, Rolls-Royce achieved underlying sales of £17.8 billion, a 15% increase compared to the previous year, and generated £2.4 billion in cash, nearly double its figure from the preceding year. The company’s operations span various sectors, including civil aviation, fighter jet engines, and nuclear reactors for submarines, and it was compelled to secure emergency funding during the pandemic as international air travel declined sharply.

Following the existential threat posed by the pandemic, Rolls-Royce appointed Tufan Erginbilgiç as its chief executive in 2023, tasked with enhancing the company’s valuation. The recovery of air travel, coupled with increased defense spending in response to Russia’s invasion of Ukraine, supported this effort. The number of flying hours logged by Rolls-Royce engines on passenger jets exceeded 2019 levels for the first time in 2024.

Erginbilgiç has also announced that the company will meet its operating profits targets set in late 2023, two years ahead of schedule, despite facing supply chain disruptions that could persist for another 18 months. The CEO expressed confidence in the company’s transformation into a more competitive and resilient business and highlighted the reinstatement of shareholder dividends, along with plans for a £1 billion share buyback in 2025.

Rolls-Royce is aiming to increase its underlying operating profit to between £3.6 billion and £3.9 billion by 2028.

Source: https://www.theguardian.com/business/2025/feb/27/rolls-royce-dividend-share-buyback-british-jet-engine-maker-profit