London: Rolls-Royce has announced a £1.5 billion ($1.99 billion) share buyback, strengthening its commitment to returning cash to shareholders as demand for its aircraft engines, defence systems and power generation equipment continues to grow.
The British engineering company announced the move on November 12 as part of an accelerated share repurchase programme. The latest initiative is expected to be completed by February 2027, ahead of its full-year financial results.
The £1.5 billion buyback forms part of a broader £7 billion to £9 billion share repurchase programme covering 2026 through 2028. The company said the accelerated schedule reflects its confidence in future cash generation and the progress of its ongoing business transformation.
Chief Executive Tufan Erginbilgic said the company had continued to deliver strong operational, strategic and financial progress during the second half of 2026. He also highlighted the potential for sustainable free cash flow growth in the coming years.
Rolls-Royce maintained its full-year 2026 financial guidance, forecasting underlying operating profit of between £4.7 billion and £4.9 billion. It also expects free cash flow to reach between £3.8 billion and £4 billion.
The company plans to review its medium-term financial targets when it publishes its full-year results on February 25, 2027. Its latest performance has strengthened expectations that the business could deliver further improvements across its major operating divisions.
Demand in its Civil Aerospace division remains particularly strong, with the company’s large-engine order backlog reaching approximately 2,500 engines. Orders have been supported by continued activity across widebody aircraft and business aviation markets.
Large-engine flying hours increased 4% year over year during the first 10 months of 2026, reaching 114% of pre-pandemic 2019 levels. This growth reflects increased aircraft utilisation and continued demand for engine maintenance and servicing.
The company’s Defence division has also reported sustained demand across established and newer programmes. Its engines and propulsion systems remain important to military aviation, naval operations and other defence-related applications.
Power Systems has emerged as another significant growth driver. Orders in the division increased 62% year over year during the first nine months of 2026, while its order backlog reached a record £8.6 billion at the end of September.
Demand from data centres has played an important role in this expansion. Orders for gas engines used for primary power generation nearly tripled year over year as technology companies and data centre operators increased their requirements for reliable electricity supplies.
Rolls-Royce is also working to finalise a significant multi-year agreement to supply backup engines to a major hyperscale technology company. The proposed arrangement includes a framework agreement extending through 2031.
The growing demand for dependable electricity infrastructure is creating additional opportunities for the company’s power generation business. Data centres require substantial and reliable energy capacity to support expanding digital services and artificial intelligence operations.
Following the announcement, Rolls-Royce shares gained approximately 2.5% in early trading on November 12. The company’s shares had also recorded gains of around 20% since the beginning of 2026, reflecting improved business performance and investor confidence.
The latest buyback announcement highlights the company’s increasing focus on shareholder returns while continuing to invest in its aerospace, defence and power generation operations.
