Rolls-Royce transformation programme powers soaring profits and revenues

Rolls-Royce has said its transformation is continuing with ‘pace and intensity’ after reporting soaring full-year profits and revenues.

This morning, the engineering giant, which has its Civil Aerospace and Defence divisions in Derby, reported revenues of more than £20 billion for the year to 31 December, up on £18.9 billion achieved in 2024.

Pre-tax profits jumped from £2.23 billion to £6.93 billion, while underlying operating profit hit £3.46 billion, up from £2.46 billion.

The firm, which is Derby’s largest private sector employer, also revealed plans for a share buyback programme worth up to £9 billion – and upgraded its guidance for 2026.

Rolls-Royce said its growth was driven by its transformation programme, which has allowed it to “capture profitable end market growth”.

Chief executive Tufan Erginbilgic said: “Our transformation continues with pace and intensity. We are consistently achieving outcomes that were not possible before our transformation.

“With our new capabilities and mindset, we have navigated challenges from supply chain to tariffs, and delivered a strong performance in 2025, all while we built the foundations for significant growth for years to come.”

The firm’s Civil Aerospace business, which is headquartered at Sinfin, delivered significant operating profit and margin growth, driven by “stronger large engine aftermarket performance, contractual margin improvements and higher spare engine profitability”.

Highlights in Defence included Rolls-Royce submarines, alongside Assystem, AtkinsRéalis, and Frazer-Nash, forming the Capability Assured Strategic Partnership, which brings together nuclear capability in the UK to support the Royal Navy’s submarines programme and the wider Defence Nuclear Enterprise.

Currently, Rolls-Royce is investing heavily in its Raynesway site in Derby after in won an eight-year submarines contract worth £9 billion with the UK Ministry of Defence.

As a result, it is doubling the size of Raynesway and creating more than 1,000 new jobs.

And finally, Rolls-Royce SMR was chosen as the sole provider in the Great British Energy – Nuclear small modular reactors (SMR) competition to build three SMR units (mini nuclear power stations) in the UK.

In November, it was confirmed that the Wylfa site on the coast of Ynys Môn, on Anglesey, will host three Rolls-Royce SMRs, with this site capable of taking eight units.

Meanwhile, work has begun on a site in the Czech Republic. Rolls-Royce SMR has also advanced to the final stage of the Swedish competition to select a nuclear technology partner.

Mr Erginbilgic added: “Based on our 2026 guidance, we expect to deliver underlying operating profit within the prior mid-term guidance range two years earlier than planned.

“Our upgraded mid-term targets include underlying operating profit of £4.9 billion to £5.2 billion and free cash flow of £5 billion to £5.3 billion.

“Beyond the mid-term we continue to see significant growth from existing businesses as well as from new business opportunities.

“With a strong balance sheet, significant investment to support our long-term growth, and confidence in the future, we are announcing a £7 billion to £9 billion share buyback for 2026-2028 with £2.5 billion to be completed this year.”