Full year 2023 results have been announced for the British engineering and defence giant, Rolls-Royce, driven by its performance in the civil aerospace sector.

New chief executive, Tufan Erginbilgic has led this turnaround, seeing shares rise by more than 8 per cent as profits more than doubled last year, well ahead of analysts' expectations. 

Rolls-Royce manufactures jet engines for commercial aircraft along with power systems for ships and submarines.

The 2023 full-year group financial performance saw underlying operating profit fly to £1.6 billion compared to £652 million in 2022. The company reported that the underlying operating margin of 10.3% reflected the impact of strategic initiatives, commercial optimisation, and cost-efficiency benefits across the Group.

A record free cash flow of £1.3 billion was driven by operating profit and continued growth of its long-term service agreements (LTSA).

Return on capital more than doubled to 11.3%, reflecting improved operating profit and working capital management, while net debt fell to £2 billion from £3.3 billion at the end of 2022.

Tufan Erginbilgic, CEO said: "Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives. This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures."

"We are managing the business differently and our significant performance improvement in the year reflects the hard work and focused actions of all our teams. We are also continuing to invest to drive future sustainable growth. Our strong delivery in 2023 gives us confidence in our 2024 guidance and is a significant step towards our mid-term targets. We are unlocking our full potential as a high-performing, competitive, resilient, and growing Rolls-Royce."