One UK stock I was interested in a month or so was Rolls Royce and boy was I glad that I did buy in then. I was looking to see if there was any FTSE 100 stocks that appeared to be undervalued, my starting point was FTSE 100 stocks that were under the £1 mark but either showed growth potential or were companies that had maybe fallen on a tough couple of years. I was also interested in established, well known companies.
Disclaimer: This is my opinion and not to be considered financial advice
Rolls Royce was a hunch because with COVID-19 on the wane and economies opening back up there seemed to be potential that the company would make more money again through increases in the travel industry, I had ready about easyJet stock price rising and thinking about this it’s not just the airline companies, its also the manufacturers of the airplanes and in turn the manufacturers of parts for those airplanes. That was my thought process.
Also, there was a new boss appointed who made some statements about turning the company around. That was worth seeing how the market would react to that.
This was then confirmed when revenue and profits increased.
Now Rolls Royce doesn’t pay a dividend and hasn’t done this for years – hopefully, an uptick in fortunes will result in the possibility that this will return in the future
The last dividend was in 2018/2019
| Financial year end | Type | Amount | Ex-dividend date | Payment date |
|---|---|---|---|---|
| 31/12/2018 | Total | 11.70p | ||
| Interim | 4.60p | 25/10/2018 | 03/01/2019 | |
| Final | 7.10p | 25/04/2019 | 01/07/2019 | |
The current stats are
Chart
The following news summed up why the stock price increased so much
ROLLS-ROYCE SHARES SURGE AS TRAVEL REBOUND BOOSTS ANNUAL PROFITS
The company on Thursday posted a statutory operating profit of £837m in 2022, up from £513m a year earlier. Revenue grew to £13.5bn from £11.2bn.On an underlying basis, operating profit was up to £652m from £414m and better than the £489m expected by analysts. The company added that it expected underlying earnings of £0.8-1bn this fiscal year
Rolls-Royce, which gets paid when its engines on aircraft are flying and also being serviced, said large engine flying hours in civil aerospace grew by 35% year on year as recovery in international travel continued. Order intake in Power Systems grew 29% to £4.3bn.
“In 2023, we assume large engine flying hours at 80-90% of 2019’s level and 1,200-1,300 total shop visits,” the company said.
Rolls said it was going to set new financial targets in the second half of the current year as it starts a strategic review of the business, but offered little detail.
“Our transformation programme is already under way and is moving at pace. It will include a strategic review so that we can prioritise our investment towards the most profitable opportunities,” said chief executive Tufan Erginbilgic.
He added: “While our performance improved in 2022, we are capable of much more. Our transformation programme will improve our efficiency and commercial outcomes, and deliver a sustainable reduction in working capital.”
Reporting by Frank Prenesti for Sharecast.com
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