Rolls-Royce shares soared to a record high yesterday as its value hurtled towards £100billion for the first time.
On a blockbuster day for investors, the stock rose as much as 12 per cent, taking gains for the year to more than 85 per cent.
Rolls is up more than elevenfold – or more than 1,000 per cent – since ‘Turbo’ Tufan Erginbilgic took over as chief executive at the start of 2023 when the engineer was worth just £7.9billion.
Last night it was valued at £89.5billion, making it the fifth-biggest London-listed company.
The rally came as growing demand for its engines, which power commercial aircraft and military fighter jets, led it to upgrade profit forecasts.
Erginbilgic, who has been credited with turning the 119-year-old company around, now expects profits of between £3.1billion and £3.2billion, having previously targeted £2.7billion to £2.9billion.
Turbo powered: Tufan Erginbilgic (pictured) took over as Rolls-Royce chief exec at the start of 2023 when the engineering group was worth just £7.9bn
It came after the Derby firm reported a 50 per cent leap in first-half profits to £1.7billion, while revenues rose 11 per cent to £9.1billion.
‘Having already delivered a stellar turnaround, Rolls is showing no signs of taking its foot off the pedal,’ said Russ Mould of AJ Bell.
‘Rolls is the poster child for what’s capable on the stock market – a welcome reminder that Britain has plenty of business champions.’
Erginbilgic said it had overcome supply chain and tariff challenges, and was on target for profits of up to £3.9billion by 2028.
Demand has been boosted by the recovery of international travel since the pandemic.
In the first six months of the year, Erginbilgic said it improved the time its engines spend ‘on wing’ – meaning the hours engines spend powering planes before needing maintenance.
That lifts profits, as Rolls makes money from its engines’ flying hours. By increasing durability, Rolls is expecting a more-than-80 per cent improvement in flying time for its Trent engines by 2027.
Problems with the Trent 1000, which powers Boeing’s 787 models, have caused disruption for airlines including British Airways and Virgin Atlantic.
An improved blade certified in June is expected to more than double the time engines are in operation. After upgrades, time ‘on wing’ would rise to as much as six years, Erginbilgic said.
The company has shrugged off the US tariff war, including by taking ‘pricing actions’ and making cost efficiencies.
‘By February we were ready,’ Erginbilgic said. ‘We didn’t know what to predict. In an uncertain world, my personal belief is that a company’s job is not to predict what’s going to happen but to gear up to respond.’
The Rolls chief added: ‘Our processes were aligned before tariff numbers hit, we were very quick to go to the mitigations.’
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