Rolls-Royce soared after strong financials signalled a return to dividends

Rolls-Royce (LSE:RR) shares soared on Thursday, closing more than 9% higher, after the British engineer reinstated its dividend for the first time since COVID.

At one point on Thursday, Rolls-Royce shares touched a new all-time high – trading up to 503p.

Revenue for the first half increased to £8.2 billion, from £7 billion in the same period last year.

Underlying profit rose to £1.1 billion. Meanwhile, guidance for the full year was set, above prior expectations, between £2.1 billion and £2.3 billion.

It marks an upgrade of some £300 million on the last estimate provided by the engineer, back in February.

Crucially, for the investment case the company is now committing to shareholder returns via dividend for full-year 2024, with the payment expected to equate to 30% of underlying profit after tax.

On the other side of the ledger, the British company said it was planning around 2,500 job cuts across its global workforce, with a view to improving cost efficiencies.

"Our transformation of Rolls-Royce into a high-performing, competitive, resilient, and growing business is proceeding with pace and intensity,” chief executive Tufan Erginbilgic said in a statement.

He added: “These results and our increased financial resilience give us the confidence to raise our 2024 guidance and reinstate shareholder distributions in respect of the full year 2024 results."

In London, Rolls Royce shares finished Thursday 42.28p or 9.4% higher, at 491.88p.