Core Viewpoint - Rolls-Royce, despite a significant price increase of 132.5% over the past year, shows strong potential for continued growth due to robust financial performance and advancements in the decarbonisation economy [1] Financial Performance - Healthy revenue growth: Rolls-Royce reported a year-on-year revenue growth of 19% in H1 2024, supported by a 27% increase in the civil aerospace segment, which accounts for half of the company's revenues [3] - Margins improve: The gross margin increased to 24% from 21% in 2023, while the operating margin rose to 14% from 10.3% last year, leading to a net profit margin increase to 9% from 7.4% [4] - Upgraded outlook: The company has raised its operating profit guidance to a range of GBP 2.1-2.3 billion, representing a 119% increase at the midpoint from the previous range of GBP 1.7-2 billion [5] Stock Metrics - Dividends and market multiples: Rolls-Royce plans to resume dividend payments after five years, with a payout ratio of 30% of underlying post-tax profit in 2024, and a projected forward dividend yield of 1% [6][7] - The expected underlying net profit for 2024 is GBP 1.4 billion (USD 1.8 billion), indicating a forward non-GAAP price-to-earnings (P/E) ratio of 29.2x, which is favorable compared to the five-year average of 42.75x, suggesting approximately 45% upside potential [8] Decarbonisation Goals - Progress on decarbonisation: Rolls-Royce aims for net-zero emissions from its operations by 2030, having achieved a 40% reduction in greenhouse gas emissions over the past decade [9] - Recent developments: The company is developing a hydrogen fuel-compatible engine and has made strides in battery storage solutions, including a partnership with Encavis for large-scale battery storage [10] - Nuclear energy initiatives: Rolls-Royce is advancing its small modular reactors (SMRs) project, having reached the final stage of the generic design assessment, and is shortlisted to provide SMRs to Sweden [12]

Peter Hansen RYCEY Delivers Robust Profitable Growth, With Market Trends Signaling Bright Prospects We previously covered Rolls-Royce Holdings (OTCPK:RYCEY) (OTCPK:RYCEF) in May 2024, discussing the successful reversal of its fortunes after facing extreme challenges during the COVID-19 pandemic, thanks to its highly strategic "Power by the Hour" business model and recovering air travel trends. With the management guiding excellent growth through 2027 while reporting improving balance sheet health and growin ...

Financial Performance and Key Metrics Changes - Operating profit increased to £1.1 billion, a 74% year-on-year improvement, with an operating margin of 14%, up 4.4 percentage points from last year [6][19] - Free cash flow rose to £1.2 billion, compared to £0.4 billion in the first half of 2023, driven by higher operating profit and continued LTSA balance growth [7][20] - Return on capital improved to 13.8%, indicating significant value creation [8][20] Business Line Data and Key Metrics Changes Civil Aerospace - Operating profit grew to £740 million, an 85% increase year-on-year, with operating margins rising to 18%, a 5.6% increase [20][21] - Revenues increased by 27% to £4.1 billion, driven by higher shop visits and OE deliveries [19][21] - Large engine OE deliveries grew by 26% to 236, with business aviation deliveries reaching 116 [21] Defense - Operating profit increased to £345 million, a 34% year-on-year growth, with revenue growing by 18% to £2.2 billion [24][25] - Order intake for the period was £1.7 billion, with a book-to-bill ratio of 0.8x and an order backlog of £8.5 billion [24] Power Systems - Operating profit grew to £189 million, a 56% increase, with operating margins rising to 10.3% [26][27] - Order intake was £2.4 billion, with a book-to-bill ratio of 1.3x, indicating strong demand particularly in power generation [27] Market Data and Key Metrics Changes - The company reported a significant year-on-year improvement across all divisions, with strong growth in aftermarket services and commercial optimization [5][19] - The supply chain challenges are being actively managed, with a focus on 15 suppliers requiring intervention [9] Company Strategy and Development Direction - The company is focused on building a sustainably distinctive Rolls-Royce that is high-performing, competitive, resilient, and growing with improving profitability and cash flow [4][5] - Strategic initiatives include commercial optimization, cost efficiencies, and operational excellence, aimed at improving customer service and financial performance [4][5] - The company plans to reinstate shareholder distributions for full-year 2024 results, based on a 30% payout ratio of underlying profit after tax [5][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising guidance for 2024, expecting operating profit of £2.1 billion to £2.3 billion and free cash flow of £2.1 billion to £2.2 billion [36][37] - The supply chain is expected to remain challenging for another 18 to 24 months, but the benefits of the transformation program will become more visible as it stabilizes [39] Other Important Information - The company has made significant progress in reducing net debt to £822 million, the lowest position in over five years [20][32] - The organization has undergone a redesign to become simpler and more agile, with a focus on efficiency and simplification [14] Q&A Session Summary Question: Medium-term guidance and targets - Management acknowledged progress but emphasized that targets are milestones and will not be raised formally until strategic progress is consistently achieved [42][44] Question: Power Systems growth - Management clarified that while growth was 6%, power generation saw a 15% increase, with data center demand expected to accelerate [46][47] Question: Working capital expectations - Management indicated that working capital initiatives are ongoing, with expectations for a release in the second half of the year [48][49] Question: Capital structure and dividends - Management stated that a strong balance sheet is a priority, and while dividends are being reinstated, the focus remains on maintaining a resilient capital structure [54][60] Question: Tax losses and deferred tax - Management confirmed that they are closely monitoring deferred tax balances and will consider recognizing them as earnings potential expands [59]

A Rolls-Royce Trent 700 engine for the Airbus A330 stands in a workshop of N3 Engine Overhaul Services GmbH. The company is a joint venture between Lufthansa Technik AG and Rolls-Royce for the maintenance of aircraft engines. Shares of Rolls-Royce jumped more than 11% to hit an all-time high on Thursday after the company reinstated its dividend and raised its profit forecast on the back of strong first-half results. Shares had pared gains slightly to trade 8.8% higher by 8:24 am London time. This is a break ...

The recent market retreat was halted on Monday, with the Nasdaq, the S&P 500, and the small-cap Russell 2000 all surging to start the week. The bulls showed they are ready to fight as big tech earnings season heats up. Earnings reports are due out from Alphabet, Tesla, Texas Instruments, and others in the coming days. There could certainly be more selling and volatility throughout earnings season, especially since big tech stocks have set the bar very high for themselves. Thankfully, the tailwinds that sent ...

Andy_Oxley/iStock Editorial via Getty Images Introduction Aircraft demand, post-pandemic, is higher than supply on a combination of traffic growth and fleet retirement while the supply chain is still complicated with Boeing (BA) safety issues, and Airbus (OTCPK:EADSF) at near full capacity. In addition, engine recalls at Pratt Whitney an RTX (RTX) company plus production delays at Rolls-Royce Holdings (OTCPK:RYCEY) and GE Aerospace (GE) provide pricing power to the sector that should boost earnings into 202 ...

About this content About the publisher The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Oliver has been writing about companies and markets since the early 2000s, cutting his teeth as a financial journalist at Growth Company Investor with a focusing on AIM companies and small caps, before a few years later becoming a section editor and the ...

Grid-scale energy storage systems enable the integration of variable renewable energy sources into the grid whilst enhancing grid stability and reliability. The fully integrated solution will allow the Customer to perform the latest available grid and trading services in the rapidly modernizing grids of the UK and EU. The solution will help to accelerate the energy transition and builds a more sustainable energy infrastructure. SOURCE Contemporary Amperex Technology Co., Limited (CATL) MUNICH, June 19, 2024 ...

Core Thesis - Rolls-Royce Holdings (RYCEY) has successfully reversed its fortunes, particularly in its Civil Aerospace, Defense, and Power Systems segments, leading to a compelling investment thesis [1][4]. Revenue Performance - RYCEY reported total revenues of £15.4 billion in FY2023, reflecting a 21% year-over-year increase, with a significant operating profit of £1.59 billion, up 143% year-over-year [3][15]. - The Civil Aerospace segment was the primary driver, generating £7.34 billion (+29% YoY) in revenue and £850 million (+497% YoY) in operating profit [4][15]. Financial Recovery - The company faced challenges during the COVID-19 pandemic, leading to cash flow issues and a significant increase in shares outstanding from 1.9 billion in FY2019 to 8.4 billion in FY2023 due to capital raises [5][7]. - RYCEY's stock price has rebounded by 607.8% since the October 2022 low, outperforming the broader market [14][9]. Future Projections - The company anticipates operating profits of £1.85 billion (+16.3% YoY) and Free Cash Flow of £1.8 billion (+40.6% YoY) for FY2024, indicating a strong turnaround [17]. - Consensus estimates project a revenue CAGR of 8.3% and EBIT CAGR of 16.3% through FY2026, reflecting improved growth expectations compared to previous estimates [19][20]. Balance Sheet Health - RYCEY's cash and equivalents increased to £3.78 billion (+45.3% YoY), while debts decreased slightly to £4.04 billion (-1.4% YoY), resulting in a healthier balance sheet with net debts of -£0.26 billion [16]. - The company is expected to potentially reinstate dividends or buy back shares once it achieves an investment-grade credit rating, projected by Fitch Ratings for 2025 [25]. Valuation Metrics - RYCEY is currently trading at a forward P/E of 27.64x, which is higher than its 1-year mean but offers a reasonable margin of safety compared to peers [23][24]. - The stock is estimated to have a long-term price target of $7.50, indicating a potential upside of 39.4% based on consensus FY2026 EPS estimates [24].

The Rolls-Royce (LON: RR) share price has done well this year, becoming one of the best performers in the FTSE 100 index. It has jumped by more than 35%, giving it a market cap of over £36 billion.Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.Antofagasta stock is surging Copy link to section However, after weeks being the best-performing company in the FTSE 100 index this year, another giant has just overtaken it. Antofagasta, one of the biggest min ...