Rolls-Royce announces £1.5bn shareholder payout

Rolls-Royce is to pay out £1.5bn to shareholders and has announced dividends will return after a rise in profits.

The company, which is based in Derby and manufactures items ranging from jet aircraft engines to propulsion systems for sea vessels, generated an operating profit of £2.5bn in 2024, according to its full year results.

Its operating profit had risen by 55% on the year before after sales rose by £2.4bn.

The firm gifted 150 shares to each of its workers, worth about £700, in August and will pay a dividend of 6p per share following its results.

The latest figures mark a turnaround in the fortunes of Rolls-Royce, which was forced to announce 9,000 job cuts and raise billions in emergency funding after it was hit by a fall in air travel during the Covid-19 pandemic.

It appointed former executive at BP, Tufan Erginbilgic, as CEO early in 2023, who initially described the company as a "burning platform" and said its current performance was "unsustainable".

The engineering giant then underwent a revival over the next 18 months and announced a gift of 150 shares to its 42,000 workers worldwide in August 2024 after a rise of £1.1bn in profits over the first half of the year.

Mr Erginbilgic said: "Strong 2024 results build on our progress last year, as we transform Rolls-Royce into a high-performing, competitive, resilient, and growing business.

"All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging.

"We are moving with pace and intensity."

He added: "Significantly improved performance and a stronger balance sheet gives us confidence to reinstate shareholder dividends and announce a £1bn share buyback in 2025."

The dividend of 6p per share would need to be approved by shareholders at the company's annual general meeting on 1 May, but should then be completed by 16 June.

The dividend payout will be worth £500m in total and will be combined with the £1bn share buyback scheme.

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