Comeback kings: Rolls-Royce and M&S defy market gloom

Two of Britain’s best-known companies have emerged from doldrums to become unlikely stock market winners this year.

Engine maker Rolls-Royce has been the best performing stock in the FTSE 100 in 2023 and High Street leader Marks & Spencer is one of the second-tier FTSE 250 stars.

Both companies have lost much of their luster in recent years due to business difficulties.

But they are shining brightly again, as both have upgraded their outlook over the past month, even as the broader UK stock market struggles. Rolls-Royce shares have soared this year, more than doubling in value.

Chief Executive Tufan Erginbilgic inherited a business that he described earlier this year, shortly after taking over, as a “burning rig”. But investors have accepted his restructuring plan.

Last month, the company buoyed investors with improved earnings, revealing that it will raise between £1.2bn and £1.4bn this year, up from £800m and £1bn previously forecast.

That only added fuel to the explosive rise of the Derby-based company, which has seen shares jump 114 per cent so far this year, though at 201.2p last night they are still a long way from the nearly 400p peak. achieved in 2014.

M&S has also been adding shine under Stuart Machin, who has been in charge since May of last year.

He inherited a company that was already showing improvement under his predecessor Steve Rowe and Chairman Archie Norman.

It follows years in which its bosses fought to reboot the 139-year-old High Street stalwart.

Now the recovery efforts are paying off and M&S last week announced its own profit improvement on the back of strong sales.

The stock is up 79 per cent, making it the third best performer in the FTSE 250 so far this year and is on track to return to the FTSE 100.

Russ Mould, chief investment officer at AJ Bell, said: “Many investors could have been forgiven for putting both companies on the ‘too tough’ list.”