Rolls-Royce shares soar to record high as recovery gathers pace

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STORY: Rolls-Royce shares soared to a record high on Thursday, jumping 11%.

Investors toasted the engineering giant's latest update as the British firm said it would restart its dividend after it upgraded forecasts for this year.

Rolls-Royce now forecasts underlying operating profit of up to $2.95 billion.

That's hundreds of millions up on the number it guided for in February, and well ahead of market expectations.

CEO Tufan Erginbilgic said his transformation of the company was proceeding with "pace and intensity."

The plane engine maker had not paid a dividend in four years, when flying stopped during the pandemic.

A strong first-half performance saw underlying operating profit rise to $1.47 billion, close to double last year's figure.

Rolls-Royce's operating margin rose to 14%, with the biggest gain in its civil aerospace unit.

The group also raised its forecast for free cash flow of up to $2.8 billion.