26th Feb 2026 07:59
(Alliance News) - Rolls-Royce has hailed its transformation as it reported better-than-expected annual earnings and announces a new buyback, London Stock Exchange Group also unveiled a new share repurchase programme while WPP is looking to revive its fortunes.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 10,822.91
GBP: higher at USD1.3549 (USD1.3537 at previous London equities close)
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BROKER RATINGS
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Berenberg starts Cairn Homes with 'buy' - price target EUR2.90
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COMPANIES - FTSE 100
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Jet engine maker Rolls-Royce says its transformation is continuing with "pace and intensity" and it believes it can meet a medium-term profit goal two years earlier than planned. In 2025, pretax profit more than trebled to GBP6.94 billion from GBP2.23 billion, with revenue up 12% to GBP21.21 billion from GBP18.91 billion. Underlying revenue, which excludes derivative and FX adjustments, improved at the same speed, hitting GBP20.06 billion from GBP17.85 billion and beats company-compiled consensus of GBP19.61 billion. Underlying pretax profit jumped 46% to GBP3.35 billion from GBP2.29 billion, and tops consensus of GBP3.16 billion. Underlying operating profit surged 41% to GBP3.46 billion, comparing favourably to consensus of GBP3.27 billion. Free cash flow shot up to GBP3.27 billion in 2025, from GBP2.43 billion in 2024. "Our transformation continues with pace and intensity. We are consistently achieving outcomes that were not possible before our transformation. With our new capabilities and mindset, we have navigated challenges from supply chain to tariffs, and delivered a strong performance in 2025, all while we built the foundations for significant growth for years to come," Chief Executive Officer Tufan Erginbilgic says. For 2026, Rolls-Royce expects underlying operating profit between GBP4.0 billion and GBP4.2 billion, as well as free cash flow in the range of GBP3.6 billion and GBP3.8 billion. The CEO adds: "Based on our 2026 guidance, we expect to deliver underlying operating profit within the prior mid-term guidance range two years earlier than planned. Our upgraded mid-term targets include underlying operating profit of GBP4.9 billion-GBP5.2 billion and free cash flow of GBP5.0 billion-GBP5.3 billion. Beyond the mid-term we continue to see significant growth from existing businesses as well as from new business opportunities." Rolls-Royce announces a 5.0 pence final dividend, taking its full year payout to 9.5p, up from 6.0p. In addition, it announces a GBP7 billion to GBP9 billion share buyback for 2026 through to 2028, with a GBP2.5 billion chunk to be completed this year.
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London Stock Exchange Group hailed "another year of very strong financial performance" and it announces GBP3 billion worth of buybacks for the year ahead. Pretax profit in 2025 rose 57% to GBP1.97 billion from GBP1.26 billion, the stock exchange operator and data firm says. Total income excluding recoveries was up 5.8% to GBP8.99 billion from GBP8.49 billion, whole including recoveries, it rose 5.5% to GBP9.35 billion from GBP8.89 billion. "We have achieved another year of very strong financial performance, driving continued top line momentum through significant investment in our product right across the business, bold strategic choices and an enduring focus on partnership with our customers. Our unmatched combination of trusted data and infrastructure is translating into deep customer engagement: in Q4 alone, major financial institutions signed long-term contracts worth GBP1.9 billion to access our leading data and workflow," CEO David Schwimmer says. "With our LSEG Everywhere data strategy, we are positioning ourselves as the partner of choice for licensed, trusted data as the use of AI in decision-making scales - and we are seeing very positive signs of adoption. In Post Trade Solutions, we have aligned ourselves strategically with key customers through their investment in the business. Through the transformation of our systems and the use of AI and other technologies, we continue to deliver material operating leverage, with earnings growth significantly exceeding revenue growth." LSEG has lifted its final dividend by 16% to 103.0p per share from 89.0p, with its total dividend up 15% to 150.0p from 130.0p. The CEO adds: "Today we're announcing our plan to execute a further GBP3 billion of share buybacks over the next 12 months." Looking to 2026, it expects organic constant currency growth in total income, excluding recoveries, in a 6.5% to 7.5% range, compared to 7.1% in 2025.
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COMPANIES - FTSE 250
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Grocer and warehouse technology firm Ocado Group says it is "on track to turn cash flow positive" as it posts a swing to annual profit on a gain on the valuation of its grocery joint-venture. Pretax profit in the year to November 30 amounted to GBP402.9 million, swinging from a loss of GBP352.8 million. Revenue climbed 12% to GBP1.36 billion from GBP1.21 billion. A GBP756.0 million boost from adjusting items, compared to only a GBP12.4 million lift the year prior, improved its bottom line. Ocado booked a GBP782.6 million gain on the statutory valuation of its investment in Ocado Retail, where it partners with Marks & Spencer. "Ocado Group began accounting for Ocado Retail Limited as an associate using the equity method. There was no change in Ocadoʼs 50% shareholding and economic interest. As a consequence of the accounting change, Ocado recognised a valuation of GBP750 million for its 50% share of Ocado Retailʼs equity and an accounting gain of GBP783 million. No consideration was received on deconsolidation," it adds. Ocado Group's adjusted earnings before interest, tax, depreciation and amortisation for the year improved 59% to GBP178.0 million from GBP111.7 million, the firm says. CEO Tim Steiner says it was a year of "tangible progress" and adds that the firm has "completed a very significant phase of investment in our robotics and automation capabilities". "Our ongoing R&D investment will be concentrated on areas where we see the clearest path to value creation for Ocado and our partners. We are also reshaping parts of our organisation to focus our commercial strategy and simplify our operating model as we re-engage in multiple international markets, following the end of exclusivity arrangements. These changes will also reflect the lower structural cost base that we have signalled over recent years. Regrettably, this means a significant number of roles will no longer be required. We are grateful to colleagues who are affected by these changes, and whose talent and hard work have made a lasting contribution to Ocado. We will support those impacted through this process," the CEO adds.
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Advertising agency WPP says it has unveiled a new strategic plan, supported by an aim to generate "GBP500 million of gross annualised cost savings and portfolio rationalisation to unlock value". WPP's reported pretax profit slumped 87% in 2025 to GBP131 million from GBP1.03 billion. Revenue fell 8.1% to GBP13.55 billion from GBP14.74 billion. Less pass-through costs, revenue fell 10% to GBP10.18 billion. "My first six months as CEO have only reinforced my conviction that WPP is an extraordinary company. As our clients navigate uncertainty, AI disruption and macro-volatility, we're looking ahead with a clear and focused mission: to be the trusted growth partner for the world's leading brands in the era of AI," CEO Cindy Rose says. "Our recent underperformance has been driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution. While disappointing, I see huge potential as these issues are all within our power to fix and we're already making great progress." WPP's strategy, dubbed elevate28, aims to "simply" its proposition. It adds: "Transitioning from a holding company structure to a single company, WPP will simplify its business to deliver fully integrated, AI-enabled solutions through four core operating units: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions across four regions, North America, Latin America, EMEA and APAC." WPP continues: "The plan focuses on stabilising the business in 2026, building momentum in 2027, and delivering accelerated, high-quality growth from 2028, supported by GBP500 million of gross annualised cost savings and portfolio rationalisation to unlock value." WPP says it saw an improvement on new business in the fourth quarter and early this year. It expects like-for-like revenue less pass-through costs to decline in the mid to high-single digits in the first half of 2026 "with an improving trajectory in the second half". For the whole of 2026, it expects a headline operating margin in the range of 12% and 13%, compared to 13.0% in 2025. WPP's final dividend was sharply lower at 7.5p from 24.4p, with the annual payout down to 15.0p from 39.4p.
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OTHER COMPANIES
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Veterinary firm CVS Group expects annual results in line with market expectations, as it reports a half-year profit decline. Pretax profit edged down 4.4% to GBP15.2 million in the six months to December 31, from GBP15.9 million a year prior. Revenue, however, rose 5.8% to GBP356.9 million from GBP337.3 million. The adjusted Ebitda was up 3.9% on-year to GBP67.7 million, and CVS says it expects an annual outcome in line with consensus of GBP141.9 million. The company says its expansion in Australia is progressing well. Meanwhile, it highlights that "the cohort of covid puppies and kittens...will require more treatment as they age."
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By Eric Cunha, Alliance News news editor
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Related Shares:
Cairn HomesRolls-RoyceLondon Stock ExchangeOcadoWPPCVS Group