Summary:
Rolls-Royce is expected to announce a fresh share buyback of up to £1.5bn (~$2bn) with annual results this week, Sky News reported
The company has not commented
Rolls-Royce already reinstated payouts last year, unveiling a £1bn buyback alongside results
Management has been running additional capital returns, including a £200m “interim” buyback ahead of FY25 results
The group’s latest guidance (set at the July half-year update and reiterated in a November trading update) points to £3.1bn–£3.2bn underlying operating profit and £3.0bn–£3.1bn free cash flow for FY25
Rolls-Royce is expected to step up shareholder returns again when it reports annual results this week, with Sky News reporting the UK aerospace and engineering group will announce a new share buyback of up to £1.5 billion (about $2 billion) alongside its numbers.
A buyback of that size would be notable but not unprecedented for the company in its post-turnaround phase. Rolls-Royce restarted shareholder distributions last year, announcing a £1 billion share buyback to be completed over the course of 2025, alongside the return of dividends following the pandemic-era suspension. That marked a shift in its capital story: after years focused on balance-sheet repair, management signalled confidence in cash generation and a framework for returning excess capital.
Since then, the company has continued to execute on that plan. In mid-December, Rolls-Royce disclosed an additional £200 million “interim” share buyback programme to run ahead of the expected release of its FY25 results on 26 February 2026.
The buyback chatter lands against a backdrop of upgraded profit and cash guidance. At its July half-year update, Rolls-Royce lifted the top end of its FY25 outlook, guiding to £3.1bn–£3.2bn underlying operating profit and £3.0bn–£3.1bn free cash flow. The company subsequently reiterated that guidance in a November trading update, reinforcing market expectations that cash generation remains strong across its major units (civil aerospace aftermarket, defence, and power systems).
If confirmed, a new buyback would likely be read as another vote of confidence in the durability of the turnaround and the underlying cash engine — but investors will still focus on the usual swing factors around results: margins and flying hours in civil aerospace, execution on any operational/supply-chain constraints, and the shape of cash conversion relative to guidance.
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