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UK defence firms raise 2026 outlook

Updated 3 times since CLSTR started tracking revisions of this situation.

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2026-07-30 22:51 UTC → 2026-07-31 10:50 UTC · added ~~removed~~

Building on a strong first‑half 2026, Rolls‑Royce lifted its underlying operating‑profit forecast for 2026 to £4.7‑£4.9 bn, up from £4.0‑£4.2 bn, after a 46 % jump in earnings to £2.53 bn and a 20 % rise in revenue to £11.28 bn. The company also raised its free‑cash‑flow target to £3.8‑£4.0 bn and announced an interim dividend of 6 p per share alongside the first tranche of a £7‑9 bn share‑buy‑back programme. Shares rose about 6 % on the FTSE 100. BAE Systems reported comparable momentum, with first‑half sales climbing 9 % to £15.77 bn and underlying earnings before interest and tax increasing 11 % to £1.70 bn. Free cash flow turned positive at £1.79 bn. The firm secured £16.4 bn of new orders, taking its order backlog to a record £84 bn – roughly double the level since the 2022 Ukraine invasion – and lifted its full‑year earnings‑growth guidance for 2026 to 10‑12 % (previously 9‑11 %). Its shares also jumped around 6 %. Both CEOs warned that the global threat environment remains volatile and that current UK defence spending still falls short of long‑term requirements, underscoring the sector’s reliance on sustained government funding. The latest H1 2026 data reaffirm the outlook, with Rolls‑Royce highlighting strong civil‑aerospace demand and elevated defence spending as key drivers, while BAE’s order backlog and guidance revisions signal confidence in continued growth. Airbus also reported solid H1 results, including a robust Defence and Space division, reinforcing broader industry strength.

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