Finance
UK's Rolls-Royce lifts returns as profit soars on aero-engines, data centres
Published by Global Banking & Finance Review®
Posted on February 26, 2026
2 min readLast updated: February 26, 2026
Quick Summary
Rolls-Royce posted a 40% profit rise driven by aero-engines. It announced a £7–£9bn 2026–28 buyback, a 5p dividend, and higher mid‑term targets, with 2025 results beating expectations.
By Sarah Young
LONDON, Feb 26 (Reuters) - Britain's Rolls-Royce posted a 40% rise in annual profit after a strong performance by its aero-engines unit and on rising power demand for data centres, enabling it to upgrade targets and significantly lift shareholder returns.
The company, whose engines power Airbus A350 widebody jets and Boeing 787s, said on Thursday it would launch a share buyback of between 7 billion pounds ($9.49 billion) and 9 billion pounds over 2026 to 2028, in addition to a relaunched dividend for 2025 of 9.5 pence.
A transformation plan launched by Chief Executive Tufan Erginbilgic three years ago has gone from strength to strength, leading to repeated upgrades and helping its shares more than double over the last 12 months.
"With our new capabilities and mindset, we have navigated challenges from supply chain to tariffs, and delivered a strong performance in 2025," the CEO said in a statement.
DATA CENTRES
The company said its power systems business benefited from the rapid build out of data centres, while its aero-engines business grew as airlines flew its engines more and Rolls improved their durability.
These trends meant that in the mid-term, it guided to underlying operating profit of between 4.9 billion pounds and 5.2 billion pounds and an operating margin of 18-20%.
Since joining in 2023, Erginbilgic has targeted higher margins, and at those levels he is bringing Rolls into line with the margins made by GE Aerospace, its main competitor in the widebody aero-engine market.
"Rolls-Royce reported 2025 results, beating expectations and more importantly releasing very strong 2026 and 2028 targets, which should trigger significant earnings upgrades," Bernstein analysts said in a note.
For 2025, the company reported underlying operating profit of 3.46 billion pounds, with a margin of 17.3%, beating a consensus of 3.27 billion pounds, while its guidance for 2026 of between 4 billion and 4.2 billion pounds, is at least 8% ahead of the current analyst forecast.
($1 = 0.7378 pounds)
(Reporting by Sarah Young; Editing by Kate Holton)
Key Takeaways
- •Annual profit rose 40% on strong aero-engine performance.
- •Announces £7–£9bn share buyback for 2026–2028 and a 5p final dividend.
- •Mid-term targets raised to £4.9–£5.2bn underlying operating profit with 18–20% margin.
- •2025 underlying operating profit hit £3.46bn with a 17.3% margin, beating consensus.
- •Power Systems benefits from data-centre demand; transformation under CEO Tufan Erginbilgic continues.
Frequently Asked Questions about UK's Rolls-Royce lifts returns as profit soars on aero-engines, data centres
1What is the main topic?
Rolls-Royce reported a 40% rise in annual profit and lifted shareholder returns, unveiling a multiyear buyback, a final dividend, and upgraded mid-term performance targets.
2How much is Rolls-Royce returning to shareholders?
The company plans a £7–£9 billion share buyback over 2026–2028 and announced a final dividend of 5 pence per share.
3What drove the profit surge?
Stronger aero-engine performance, including demand tied to Airbus A350 and Boeing 787 programs, plus improvements from an ongoing transformation plan and data-centre-led Power Systems growth.
