Rolls-Royce Holdings said on Thursday it will run a £1.5bn interim share buyback to finish by its 25 February 2027 full-year results, and guided to 2026 free cash flow of £3.8bn-£4.0bn, up from £3.6bn-£3.8bn in February.
The buyback sits inside the existing £7bn-£9bn programme for 2026 to 2028, and the company said it is accelerating the phasing of that programme. The £2.5bn tranche announced for 2026 has been substantially completed, it said.
Underlying operating profit guidance for 2026 is now £4.7bn-£4.9bn, against £4.0bn-£4.2bn given in February. The 2025 outturn was £3.5bn, up from £2.5bn in 2024.
Tufan Erginbilgic, chief executive, said the buyback “reflects our continued confidence in sustainable free cash flow growth driven by our transformation and the significant value creation we continue to see ahead.”
The company said it will revisit its mid-term targets at the February results, as previously communicated. Those targets, set with the 2025 results on 26 February 2026 on a 2028 timeframe, include free cash flow of £5.0bn-£5.3bn and underlying operating profit of £4.9bn-£5.2bn.
The previous mid-term targets were £4.2bn-£4.5bn for free cash flow and £3.6bn-£3.9bn for underlying operating profit. The new 2026 guidance range for operating profit therefore already sits close to the lower end of the current mid-term range.
The multi-year buyback was announced in February, after a £1bn buyback in 2025. Rolls-Royce said then that the 2026 tranche of £2.5bn included £200m completed between 2 January and 20 February 2026.
The company also paid a total dividend of 9.5p per share for 2025, a 32% payout ratio of underlying profit after tax. Net cash stood at £1.9bn at 31 December 2025, against £475m a year earlier.
Large engine flying hours grew 4% year on year in the first 10 months of 2026 to 114% of 2019 levels, against 113% in the first half.
The company expects the full-year figure towards the lower end of its 115% to 120% range.
Its large engine order backlog has grown to around 2,500 engines. Second-half orders include 70 Trent 7000 engines for Avolon and 22 for the Cathay Group, while Air China and Philippine Airlines selected 15 Trent XWB-84 and 18 Trent XWB-97 engines respectively.
In October, Rolls-Royce and the UK government announced plans for a joint 10-year £2.5bn research and technology programme for gas turbine technologies.
The company said the Airbus A350F, powered exclusively by the Trent XWB-97, completed its first flight in September and has orders for more than 100 aircraft from 14 airlines.
The full-year results on 25 February 2027 are the date by which the interim buyback is due to be completed and the mid-term targets revisited.
