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LONDON — Rolls-Royce shares jumped more than 10% on Thursday after the British aerospace group more than doubled its annual profits in 2023 and forecast further momentum this year.

Rolls-Royce, which manufactures jet engines for commercial aircraft along with power systems for ships and submarines, posted an underlying operating profit of £1.6 billion ($2 billion) in 2023, compared to £652 million in 2022.

The group also reported a record free cash flow of £1.3 billion, driven by strong operating profit and continued growth of its long-term service agreement (LTSA) book.

Return on capital more than doubled to 11.3%, while net debt fell to £2 billion from £3.3 billion at the end of 2022.

“Our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives,” CEO Tufan Erginbilgic said in a statement.

“This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.”

The group forecast underlying operating profit growth of at least 6% in 2024, putting the annual figure in the range of £1.7 billion to £2 billion, while free cash flow is forecast to land between £1.7 billion and £1.9 billion.

Rolls-Royce was the top performer in Britain’s FTSE 100 in 2023, soaring over 200% on the back of a profit forecast upgrade and the announcement in November that profits could quadruple by 2027.

“Our strong delivery in 2023 gives us confidence in our 2024 guidance and is a significant step towards our mid-term targets,” Erginbilgic added.

“We are unlocking our full potential as a high-performing, competitive, resilient, and growing Rolls-Royce.”

Jarek Pominkiewicz, equity research analyst at Quilter Cheviot, said Rolls-Royce logged a “remarkable performance” in its full-year results, delivering a “positive surprise with its Power Systems and Defence segments, which both exceeded the guidance and showed robust growth.” 

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