Aero-engine group Rolls-Royce, whose defence business is in Bristol, achieved a 28% rise in profits and a record order book of £61.4bn during the first half of this year.
Underlying pre-tax profits rose from £465m in the same period last year to £595m on the back of a jump in the number of airlines choosing Rolls-Royce engines for new aircraft, stronger demand for repairs and maintenance, a better revenue mix, currency movements and higher productivity. The figure was higher than City expectations of around £552m. Orders secured during the first half totalled £8.7bn.
“This order book and our strong market position reinforce our belief that the group’s revenues will double in the next decade through organic growth alone,” said the group.
However, group revenues are expected to grow modestly in 2011 as strong growth in civil and defence aerospace is partly offset by a slowdown in the marine business.
Rolls-Royce’s plant at Patchway is the group’s main base for military engines, working on powerplants such as the EJ200 for the Eurofighter Typhoon and the Ardour for Hawk trainers. The plant is a world-leading centre of excellence for Stovl (short take off and vertical landing) technology which is now being used for a variant of the new F35 Lightning II Joint Strike Fighter – although cost cuts have put the programme on hold.
Patchway is also becoming a major base for marine engines.
Defence aerospace's order book reduced from £6.5bn to £6.2bn and engine deliveries declined by 12% to 330 during the half year as a result of military budget cuts in Europe and the US. However, underlying revenues in the business climbed by 7% to £1.08bn and underlying profits rose 39% to £219m.
Dan Korte, Rolls-Royce, president – defence, said: “Once again the defence business has demonstrated its resilience in a tough economic climate and made an excellent contribution to the group’s interim results.
“In addition to the delivery of new engines for programmes such as the Typhoon, our performance in the first half of the year has once again illustrated the importance of our services business. We have a huge responsibility to support our customers in their operations around the world and our activities are mission critical. In particular I’d like to thank the Bristol team for its tremendous efforts in support of the UK’s recent commitments as part of Operation Ellamy in Libya.
“Looking forward, while our traditional markets remain challenging, we can see growth in emerging export markets such as India and the Middle East and we have a strong portfolio of programmes to meet these requirements. If we can maintain our focus on delivering innovative engines and services at a price the customer can afford we have a bright future.”
