27 February 2025
If you are covering Rolls-Royce full year 2024 results, please find comments below from Matt Dorset, equity research analyst at Quilter Cheviot:
"Rolls-Royce released very strong results across the board this morning, leaving the shares up 15% at the time of writing. Results for 2024 were very solid, with 17% revenue growth, 57% operating profit growth, and free cash flow (FCF) almost doubled compared to 2023. Growth was supported by all segments and was ahead of consensus expectations across the board.
“The key driver continues to be the Civil Aerospace business. Not only did Rolls-Royce increase engine deliveries by 16%, but revenue generated from aftermarket services was even stronger with 28% growth. Fundamentally, this continues to be supported by air traffic growth post-pandemic and constrained aircraft supply which leaves engines flying for longer, generating stronger aftermarket demand.
“Rolls-Royce expects this stellar performance to continue. It expects to hit its capital markets day targets set in 2023 two years early and has released new mid-term targets which are significantly ahead of estimates as a result. The company is guiding to operating profit growth (CAGR) at 11% a year to 2028, margin expansion from 13.8% to 15-17%, and FCF CAGR of 16%.
“Not only this, but Rolls-Royce is set to increase shareholder returns off the back of the strong results. A dividend has already been reinstated for 2024, and a new share buyback worth £1bn has also been announced for 2025."
