![\"Rolls](\"https:\/\/dailybusinessgroup.co.uk\/wp-content\/uploads\/2020\/05\/Rolls-Royce-Inchinnan.png\")
Rolls-Royce has posted a strong first half with underlying operating profit rising 46% to \u00a32.5 billion as it benefits from its transformation programme.<\/p>\n
The company achieved an underlying operating margin of 22.5% (H1 2025: 19.1%) and improved profitability across all three divisions.\u00a0It now expects a \u00a34.7bn-\u00a34.9bn underlying operating profit and \u00a33.8bn-\u00a34.bn in free cash flow<\/p>\n
The company announced an interim dividend of 6p per share and has completed \u00a31.4bn of its \u00a32.5bn share buyback programme for 2026.<\/p>\n
Tufan Erginbilgic, CEO said: \u201cOur transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past. <\/p>\n
\u201cWe have unlocked new growth opportunities across the group and created a resilient and diversified portfolio, with three strong businesses that can respond to changes in\u00a0the external environment with agility and pace.<\/p>\n
\u201cWe have made significant operational and strategic progress in the first half of the year.\u00a0In Civil Aerospace, where we continued to improve our aftermarket profitability,\u00a0we have also effectively eliminated aircraft on ground, providing a significant operational benefit to our customers. <\/p>\n
\u201cIn Defence, we continued to establish our leading position in autonomous propulsion with several key milestones achieved in the period. In Power Systems, we captured further profitable growth in data centres, including growing prime power demand. <\/p>\n
\u201cFollowing its recent win in Sweden, Rolls?Royce\u00a0SMR has now been successful in every competitive European nuclear tender and is uniquely positioned to become a global market leader.<\/p>\n
\u201cA strong start to the year enables us to raise our guidance for 2026\u00a0despite the conflict in the Middle East. We now expect to deliver underlying operating profit of \u00a34.7-\u00a34.9bn and free cash flow of \u00a33.8-\u00a34.0bn. <\/p>\n
\u201cThis builds further confidence in our mid-term targets. The actions that we have taken and investments we have made will drive significant profitable growth to the mid-term and beyond.\u201d<\/p>\n
Chris Beauchamp, chief market analyst at investing and trading platform IG<\/strong>, said: \u201cRolls-Royce\u2019s profit engine is firing on all cylinders and the shares have reacted in predictably enthusiastic fashion.<\/p>\n \u201cThis is recovery in both the civil and military divisions, reminding investors that Rolls is a giant that straddles both these markets in impressive fashion. Now it just has to make sure the second half delivers on the guidance.\u201d<\/p>\n \t <\/div>\n