Rolls-Royce posts record profits of £1.16bn boosted by strong orders
ROLLS-ROYCE, the engine manufacturer, has reported record underlying pre-tax profits of more than £1bn (€1.2bn) for the first time, boosted by a strong order book.
Government budget cuts meant the order book in defence fell by 7pc to £6bn but Rolls said it had won £1.8bn of new business. Photo: PA
Revenue at the world's second-largest maker of aircraft engines rose 4pc to £11.3bn for the year to December 31 as the order book grow 5pc to a record £62.2bn.
Underlying pre-tax profits, which excludes hedging of foreign currencies, rose from £955m to £1.16bn in 2011.
The company, which also builds and tests nuclear devices for the UK navy, increased the full-year dividend by 9pc to 17.5p a share.
John Rishton, the Rolls-Royce chief executive, said: “Our consistent strategy, which has been pursued over many years, has created a broad and balanced portfolio and established a strong financial position.
"Despite continued macroeconomic uncertainty, our record order book and strong market positions underpin our confidence in the future.
"The increasing resilience of the business has enabled Rolls-Royce consistently to grow its underlying revenue, underlying profit and order book in spite of the significant macro economic turbulence of recent years."
Rolls-Royce has doubled its revenues over the last ten years and Mr Rishton said they should be doubled again over the next decade.
Last year earnings were hit due to safety issues with the Trent 900 engine used to power the Airbus A380 superjumbo.
However, the civil aerospace division appears to have weathered the storm after its order book grew by 7pc to £51.9bn, a workload which includes more than 5,000 engines. Profits in the division increased by 27pc to £499m due to higher volumes and improved productivity.
Rolls expects the operation to produce further strong profits growth this year, alongside more modest improvements in its defence, marine and energy arms.
The pressure on Government budgets meant the order book in defence fell by 7pc to £6bn but Rolls said the £1.8bn of new business achieved in the year demonstrated there were still opportunities for growth.
Rolls completed the biggest deals in its history last year when it joined forces with Mercedes-Benz owner Daimler to acquire German engine maker Tognum for around £3bn.
The UK company will combine Tognum with its own Bergen business, which makes engines used across the maritime and power generation sectors.