Rolls-Royce shares climbed more than 5% on Thursday after the British engineering group reported a 46% rise in first-half underlying operating profit to £2.53 billion and sharply raised its full-year guidance. The stock gained 5.45% to 1,455.20 pence, helping push the FTSE 100 to a fresh intraday record of 10,950.32.
The company now expects full-year underlying operating profit of £4.7 billion to £4.9 billion, well above its prior forecast of £4.0–£4.2 billion and comfortably ahead of analysts’ estimates of around £4.2 billion. Free cash flow for the first half rose to £2.0 billion. Chief Executive Tufan Erginbilgic said the transformation programme is delivering strategic and operational gains across all three divisions: civil aerospace, defence, and power systems. Civil aerospace margins improved to 25.3%, supported by stronger aftermarket activity and better long-term service contracts. The defence arm benefited from the UK’s military investment plans, while power systems saw strong data centre demand for backup and primary power solutions.
The broader FTSE 100 also gained from rising commodity shares, with miners and energy stocks advancing. However, the index’s record masked a sharp divergence: Mondi jumped 15.2% despite lower interim earnings, while Rentokil plunged 17.3% after warning of weaker North American residential demand and scrapping its 2027 margin target. The Bank of England was expected to hold its key rate at 3.75% later in the day, but markets watched for any hawkish signals that could lift gilt yields and sterling, potentially pressuring domestic-focused stocks. For crypto markets, the traditional risk-on tone may provide a mildly supportive backdrop, though direct effects are minimal.
