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UK-based Rolls-Royce positions itself as potentially the largest company in the country

Tufan Erginbilgic, CEO, voiced his support for London, dismissing speculation that Rolls might transfer its listing to New York, similar to other prominent companies.

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Rolls-Royce: Potential to Surpass Other U.K. Companies and Secure Top Spot in Corporate Rankings
Rolls-Royce: Potential to Surpass Other U.K. Companies and Secure Top Spot in Corporate Rankings

UK-based Rolls-Royce positions itself as potentially the largest company in the country

Rolls-Royce, currently the sixth-largest company on the FTSE 100 with a market capitalisation of £92bn, has announced ambitious plans to become the largest. This move is a vote of confidence in the London market, according to Susannah Streeter, an analyst at Hargreaves Lansdown.

The company's growth strategy revolves around its nuclear capability, particularly the development and deployment of small modular reactors (SMRs). CEO Tufan Erginbilgic predicts a global need for about 400 SMRs by 2050, each costing around $3 billion, creating a trillion-dollar-plus market.

Rolls-Royce has already secured contracts to supply SMRs to the UK and Czech governments, positioning itself as a key player in next-generation nuclear power. The company's unique nuclear expertise, unmatched by any private company globally, is particularly notable in SMRs that enable more flexible, smaller-scale nuclear energy production suitable for powering energy-intensive AI applications.

The firm expects its SMR business to be profitable and free cash flow positive by 2030, reflecting confidence in the commercial viability of its nuclear segment. Rolls-Royce's nuclear reactors could potentially make them the market leader globally in the artificial intelligence technology sector.

Erginbilgic, a former BP executive who took over Rolls-Royce in 2023, has been credited with turning the company's fortunes around. Since his tenure, the company has overseen a tenfold increase in the share price. The recovery of the travel industry has boosted Rolls-Royce's civil aerospace unit, and Erginbilgic aims to quadruple profits and dramatically fatten margins.

Rolls-Royce is listed on various DIY investing platforms, including AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212. However, the company prefers to maintain its listing on the London Stock Exchange, believing London provides the best environment for growth despite significant US shareholder presence.

Despite a recent exodus from the London market, Rolls-Royce's ambition to become the largest company is seen as a positive sign. If successful, Rolls-Royce could potentially become the UK's largest listed company on the FTSE 100. Erginbilgic has stated that if they are not the market leader globally, they have done something wrong.

It's important to note that Rolls-Royce has contracts to build mini-nuclear reactors, including the contract for Britain's Small Modular Reactor program and an agreement with the Czech government. However, the company has dismissed the idea of a switch in listing to New York, stating it is not part of their plans.

For those interested in investing, a comparison of the best investing accounts is available on This Money's website. However, it's essential to remember that This Money may earn a commission if a product is taken out from these platforms, but this does not affect their editorial independence.

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