Rolls-Royce Shares: Company to Unveil New £1 Billion Buyback, Reports Sky News

Rolls-Royce (LON: RR.) is preparing to launch another major share repurchase program, with Sky News reporting Sunday that the company will unveil a new buyback of more than £1 billion when it posts annual results on Thursday.

The move comes as the engineering group prepares to report record earnings and highlight the scale of its multiyear turnaround.

According to Sky reporter Mark Kleinman, the new buyback could reach as much as £1.5 billion, adding to the company’s final dividend and reflecting the strength of free cash flow at a business that faced existential pressures during the pandemic.

The latest program would follow last year’s £1 billion buyback, the company’s first since 2014, when it sold its energy unit to Siemens.

Rolls-Royce’s revival has accelerated under chief executive Tufan Erginbilgic, the former BP executive brought in to reshape the business.

Its market capitalisation has surged to £112.6 billion, with the stock more than doubling over the past year alone.

Rolls-Royce shares are up 15.2 percent year to date and 108 percent over the last 12 months, extending a rally that began in 2023 and has continued to push the stock to fresh highs.

The company lifted full-year profit guidance last July, forecasting underlying operating profit between £3.1 billion and £3.2 billion.

At the time, chief financial officer Helen McCabe said buybacks remained “in our tool kit,” noting the firm’s focus on balancing investment needs with shareholder returns.

Sky News also reported that Erginbilgic is set for a multimillion-pound pay rise under a revamped remuneration policy.