Shares in Rolls-Royce, the British maker of aircraft engines and other power systems, surged nearly 20 percent Wednesday as a turnaround plan under new leadership delivered far better-than-expected results.
Rolls shares rallied 19.1 percent to 181.85 pence, topping London's FTSE 100 index in morning deals.
In a trading update, the company said it would shortly post "significantly improved first-half results", in terms of underlying operating profit and free cash flow, while it has also upgraded full-year forecasts.
"Our multi-year transformation programme has started well," Rolls-Royce chief executive Tufan Erginbilgic said in the statement.
He added that "despite a challenging external environment, notably supply chain constraints", Rolls had begun to see the impact of its transformation across the group.
"Better profit and cash generation reflects greater productivity, efficiency and improved commercial outcomes," said Erginbilgic, an executive at British energy giant BP before leading Rolls from the start of 2023.
On Wednesday, he cautioned there was "much more to do to deliver better performance and to transform Rolls-Royce into a high performing, competitive, resilient, and growing business".
Rolls will publish full half-year results on August 3.
Erginbilgic, a dual UK and Turkish national, replaced long-serving boss Warren East.
"Rolls-Royce is boosting full-year guidance for operating profits and cash flows by around 50 percent, one of the largest improvements seen so far in the current reporting season," said Steve Clayton, head of equity funds at Hargreaves Lansdown.
"The company is benefiting from a recovery in flying hours by the airline industry, which is pushing more aircraft into the workshops for engine overhauls," he also noted.
