A record order book of £61.4bn and underlying solid growth in first half profits has allowed aero enginemaker Rolls-Royce to shrug off turmoil in the world's financial markets.
Chief executive John Rishton says the company has continued to perform well in the third quarter and expects a continued flow of orders across the business.
He said the company, whose defence business is headquartered at Patchway, is seeing the benefit of a consistent and long-term strategy which has given us a broad installed base of power systems. He added that the Rolls-Royce's record order book and its strong market position "reinforce our belief that the group’s revenues will double in the next decade through organic growth alone".
The group recently acquired a half share in German engineer Tognum in a venture with Daimler and Mr Rishton said implementation, with Daimler of their joint plans will accelerate that growth.
Rolls-Royce is the world's second biggest maker of aircraft engines after General Electric. Commercial clients include Airbus and Boeing and the order book benefited from new first half orders of £8.7bn, up 60 per cent on a year earlier. It comprised £6.5bn in civil aerospace, £0.8bn in defence aerospace, £1.0bn in marine and £0.4bn in energy.
Last month it agreed to sell for £941.2m its share on the International Aero Engines (IEA) to its consortium partner Pratt & Whitney. IEA produces engines for the Airbus A320 family and is forming a new joint venture with Pratt to develop the next generation of engines for the mid-sized narrow body airliner marker – where analysts see demand for 20,000 planes over the next 20 years. This deal is viewed as a positive move by the market.
In the defence business the group says a 5% reduction in the order book to £6.2bn reflects budgetary pressures in Europe and North America. However, new orders of £0.8bn – down from £1.2bn a year ago – confirm that opportunities still exist, particularly in services, in its traditional markets as well as in the developing economies.
Meanwhile the US Department of Defence has halted the F136 second engine programme for the F-35 Lightning II Joint Strike Fighter (JSF) with development around 80% complete. Mr Rishton said: "We continue to consider options with our partner General Electric Co. He added that the Short Take-Off and Vertical Landing (STOVL) variant of the JSF is on probation and the Liftsystem is performing well in testing.
Elsewhere, the TP400 engine for the A400M transporter, whose wings were designed and for which the key parts are made in Bristol, has completed engine certification. Flight testing continues.
Mr Rishton said the Tognum deal would add "significantly to the scale of energy and marine opportunities while the Pratt agreement was an important new venture.
The group is expected to report 2011 pre-tax profits of between £1.04bn and £1.49bn.
