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.

—

Primary listing

Exchange: London Stock Exchange under ticker RR

• This is the main and most liquid listing. Index membership: FTSE 100

US trading (ADR)

Market:

• US OTC market
• Ticker: RYCEY (ADR)
• Also trades under RYCEF (ordinary shares, OTC)