Investors made wary by a string of profit warnings from Rolls-Royce Holding PLC (LON:RR.) reacted with relief on Thursday after the jet engine maker confirmed it was on track to hit targets.
The stock powered ahead by 103p, or 14.1%, to 835p after Rolls said it performed broadly in line with hopes in the first half and was leaving second-half guidance unchanged.
Rolls has flown into turbulence in the last year or so as lucrative aerospace after-sales repair and maintenance business has dropped off and marine power markets have declined.
The problems sparked several profit warnings and the departure of John Rishton as chief executive in April last year.
New chief executive Warren East has since launched a restructuring drive involving cutting thousands of jobs and removing layers of senior management.
East said on Thursday that the previously outlined problems held back revenue and profits in the first half.
But he added: “The business remains well-positioned to achieve a solid second half performance, supported by growth in engine deliveries, stronger aftermarket revenues and incremental benefits from our ongoing restructuring programmes."
Rolls-Royce said underlying pre-tax profits in the six months to June 30 fell 80% to £104mln on a 5% drop in revenue to £6.1bn.
Underlying earnings per share dipped 81% to 4.2p and the group reduced its interim dividend to 4.6p per share from 9.27p a year ago.
The group said it was expecting £50mln of savings from its restructuring drive this year and was on track to save up to £200mln by the end of 2017, with more than £100mln already identified.
Hargreaves Lansdown equity analyst George Salmon said: “Sometimes just meeting expectations is good enough, and that has proved the case today.”