Commenting on Rolls-Royce’s full-year results, Emily Sawicz, Director and Industrials Senior Analyst at RSM UK, said: “Rolls-Royce is one of the few industrial groups currently benefiting from multiple tailwinds at once with revenue and profit growth across civil aerospace, defence and power - putting the business in a strong position to fund another share buyback. In civil aviation, Rolls-Royce is benefitting from the return to travel post-Covid, driving demand for engines. In addition, improvements in engine durability and reliability are also supporting margins, as long-term service agreements become more profitable when maintenance requirements reduce.

“While supply chain constraints remain a consideration across the aerospace sector, Rolls-Royce is relatively well positioned. It is the exclusive engine provider for Airbus widebody aircraft and continues to compete strongly on the Boeing 787 platform, offering further upside if market share expands. With production rates gradually increasing, the civil division looks set to remain the primary driver of margin expansion into 2026.

“Defence demand is also strengthening amid rising global military spending, pushing order intake and backlog higher. However, as seen elsewhere in the sector, converting that demand into profitable growth will depend on how quickly supply chain inefficiencies can be resolved. Meanwhile, the power systems division is benefiting from surging demand for data centre back-up generation, although the longer-term transition towards cleaner energy solutions will be one to watch. Importantly, Rolls-Royce is already positioning itself for that shift through investment in small modular reactor technology, giving it exposure to the next phase of energy infrastructure development.”

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