Rolls-Royce Resumes Dividend Payments After Strong 2024 Performance
UK engineering giant Rolls-Royce has reinstated shareholder dividends for the first time since the Covid-19 pandemic disrupted its operations.
Following a strong financial performance in 2024, the company announced a dividend payout of 6.0p per share and unveiled a £1bn share buyback scheme, further rewarding investors.
The decision follows a remarkable 50% surge in earnings, with underlying operating profit rising to £2.5bn, up from £1.6bn in 2023.
Chief Executive Tufan Erginbilgiç emphasized the company’s transformation into a “high-performing, competitive, resilient, and growing business.” He noted that all core divisions have delivered substantial improvements despite ongoing supply chain challenges.
“We are moving with pace and intensity. Based on our 2025 guidance, we now expect to achieve our target ranges for underlying operating profit and free cash flow two years ahead of schedule.”
The company’s strengthened balance sheet and significant financial improvements have given it the confidence to reinstate dividends and launch a £1bn share buyback in 2025.
A Remarkable Turnaround
Rolls-Royce’s recovery marks a dramatic turnaround from its pandemic-era struggles. The company, which manufactures and services jet engines, operates a defence division, and develops advanced power and propulsion technologies—including nuclear propulsion for the Royal Navy’s submarines—was hit hard when airline customers grounded flights in 2020.
Dividend payments were suspended in April 2020, and by October that year, its share price had plunged below 40p. However, the stock has since rebounded sharply, closing at 631p last night, after reaching an all-time high earlier this month.
Under Erginbilgiç’s leadership, Rolls-Royce has focused on cost-cutting and efficiency improvements, while securing record-breaking orders amid rising global military tensions.
