Rolls-Royce makes 'strong start' to FY24

23rd May 2024 08:05

(Sharecast News) - Aerospace and defence business Rolls-Royce said on Thursday that it had made "a strong start to the year", building on its "record" performance in 2023 despite continued industry-wide supply chain challenges.

Rolls-Royce said it had continued to demonstrate "a strong track record of delivery", with operating profits and cash growth reflecting an underlying performance improvement, driven by the impact of strategic initiatives, notably commercial optimisation including contractual improvements, cost efficiency actions, and the effective management of ongoing supply chain challenges.

The London-listed group kept its FY24 guidance unchanged, with a broadly balanced weighting for both profit and cash flow across the year.

Rolls-Royce highlighted that in its civil aerospace unit, long-term service agreement large engine flying hours had returned to 100% of 2019 levels in the four months to 30 April, driven by the continued recovery of international traffic in Asia and its growing fleet, while its defence division saw long-term growth underpinned by several recent contract awards, and its power systems arm saw its strong position in the data centre market provide growth opportunities as it continues to see higher demand from artificial intelligence and cloud services providers

Chief executive Tufan Erginbilgic said: "Our work to transform Rolls-Royce into a high-performing, competitive, resilient and growing business is continuing with pace and intensity as we execute on the granular strategy we set out last November. We are driving growth, delivering contractual improvements and improved margins, unlocking efficiencies and creating value across the group.

"We have had a strong start to the year, despite continued industry-wide supply chain challenges. This builds on our record performance in 2023 and provides further confidence in our guidance for 2024. The focused investments we are making will continue to drive growth and create value for all our stakeholders in the mid-term and beyond."

As of 1135 BST, Rolls-Royce shares were up 2.27% at 437.70p.

Reporting by Iain Gilbert at Sharecast.com