12th Nov 2026 09:10
(Alliance News) - Rolls-Royce Holdings PLC on Thursday announced an additional GBP1.5 billion share buyback, as it stuck with full-year guidance following a positive trading performance in the second half of 2026 so far.
"We are creating a more resilient and agile Rolls-Royce with significant growth potential that is better equipped to respond to changes in the external environment," the FTSE 100 listing said in a statement.
The London-based aerospace and defence company said it was confident of meeting full year guidance of GBP4.7 billion to GBP4.9 billion of underlying operating profit and GBP3.8 billion to GBP4.0 billion of free cash flow.
In 2025, the FTSE 100 listing reported underlying operating profit of GBP3.46 billion and FCF of GBP3.27 billion.
Chief Executive Tufan Erginbilgic said the firm will revisit mid-term targets alongside full-year results in February, as previously communicated.
Shares in Rolls-Royce were up 2.7% at 1,378.80 pence each in London on Thursday morning. The wider FTSE 100 was 0.3% higher.
In a trading statement, Rolls Royce said demand remains strong in Civil Aerospace, across both wide-body and business aviation, and the large engine order backlog has now grown to around 2,500 engines.
Large engine flying hours grew by 4% year on year in the first 10 months of 2026 to 114% of 2019 levels, the firm said, with continued growth through the second half of the year supporting expectations that 2026 EFH will be towards the lower end of the range of 115% to 120% of 2019 levels, consistent with guidance at half-year results.
EFH from Middle Eastern airlines in the company's fleet are above pre-conflict levels, but have been temporarily impacted by fuel price related capacity reductions in other regions. Rolls Royce expects this to reverse when the fuel price falls.
In Defence, "we continue to see strong demand across both mature and new programmes", the firm commented.
While in Power Systems, the firm said it continues to see strong order and revenue growth, led by power generation and governmental.
Order intake in the first nine months of the year increased by 62% year on year, with the order backlog at the end of September standing at a record GBP8.6 billion, up from GBP8.0 billion at the end of June.
In power generation, orders for gas engines nearly tripled year on year driven by prime power demand from data centres, while order growth for diesel backup engines remained strong.
To support growing demand, in July Rolls-Royce opened a new logistics and operations centre in Mankato, US, enabling it to more than double production capacity for mtu Series 4000 generator sets at the site.
"Our next-generation engine remains on track to be launched in 2028 and will offer a 20% higher power density than the current Series 4000. Engine and system testing progressed to plan during the period, with initial customer feedback from demonstrations being very positive," the firm added.
Rolls-Royce said the GBP1.5 billion buyback is to be completed by its annual results on February 25, following the substantial completion of its previously announced GBP2.5 billion programme for 2026.
It forms part of the firm's existing GBP7 billion to GBP9 billion buyback plan for 2026 to 2028.
By Jeremy Cutler, Alliance News reporter
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