Rolls-Royce roars ahead as transformation pays off – Daily Business

Rolls-Royce has posted a strong first half with underlying operating profit rising 46% to £2.5 billion as it benefits from its transformation programme.

The company achieved an underlying operating margin of 22.5% (H1 2025: 19.1%) and improved profitability across all three divisions. It now expects a £4.7bn-£4.9bn underlying operating profit and £3.8bn-£4.bn in free cash flow

The company announced an interim dividend of 6p per share and has completed £1.4bn of its £2.5bn share buyback programme for 2026.

Tufan Erginbilgic, CEO said: “Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past.

“We have unlocked new growth opportunities across the group and created a resilient and diversified portfolio, with three strong businesses that can respond to changes in the external environment with agility and pace.

“We have made significant operational and strategic progress in the first half of the year. In Civil Aerospace, where we continued to improve our aftermarket profitability, we have also effectively eliminated aircraft on ground, providing a significant operational benefit to our customers.

“In Defence, we continued to establish our leading position in autonomous propulsion with several key milestones achieved in the period. In Power Systems, we captured further profitable growth in data centres, including growing prime power demand.

“Following its recent win in Sweden, Rolls‑Royce SMR has now been successful in every competitive European nuclear tender and is uniquely positioned to become a global market leader.

“A strong start to the year enables us to raise our guidance for 2026 despite the conflict in the Middle East. We now expect to deliver underlying operating profit of £4.7-£4.9bn and free cash flow of £3.8-£4.0bn.

“This builds further confidence in our mid-term targets. The actions that we have taken and investments we have made will drive significant profitable growth to the mid-term and beyond.”