Rolls-Royce profits power ahead to £1.4bn
AERO engine manufacturer Rolls-Royce has reported a 24% full year rise in pre-tax profits to £1.4bn, based on revenues of £12.2bn.
The company said a strong second half, during which it saw a 23% increase in the number of engines delivered, had contributed to the strong showing. The group’s order book is also strong, standing at £60.1bn – a 4% increase.
Rolls Royce employs 950 people at Barnoldswick, Lancashire where it produces wide-chord fan blades for the Joint Strike Aircraft.
John Rishton, Rolls-Royce chief executive, said: “In the full year, underlying profits increased for the 10th consecutive year. We have established this record of consistent delivery while continuing to invest in people, technology and facilities.
“The strength of our order book demonstrates the confidence our customers have in our products and services. Our priorities remain: delivering on the promises we have made; deciding where to grow and where not to; and improving financial performance.
“In 2013, we expect modest growth in underlying revenue and good growth in underlying profit with cash flow around break even as we continue to invest for the future.”
The results come as the group announced it had appointed a new chairman, Ian Davis, in succession to Sir Simon Robertson, who is retiring after this year’s AGM.
“Sir Simon has made an exceptional contribution over the past eight years. He has worked tirelessly on behalf of the company and his energy and enthusiasm have been an example to us all. I am delighted to welcome Ian Davis as our new chairman and look forward to working closely with him,” added Mr Rishton.
Mr Davis will join the board as a non-executive director on March 1, 2013 and take over from Sir Simon at the conclusion of the AGM on May 2.
Mr Davis spent more than 30 years with McKinsey & Company, including six as chairman and Worldwide Managing Director. He serves, as a non-executive director, on the boards of BP and Johnson & Johnson and is a non-executive member of the Cabinet Office Board.
In addition to its full-year results, Rolls-Royce has also announced the signing of a 10-year enabling contract with the Ministry of Defence which is set to sustain up to 2,000 jobs in the UK and deliver up to £200m savings to the MoD.
The group said the contract, worth around £800m, would improve efficiency and enable cost savings in the provision of nuclear propulsion systems for the UK’s existing and future submarine fleet.
Jason Smith, Rolls-Royce President Submarines said: “I am pleased that we have agreed this enabling contract with the MoD which delivers significant savings to them over the next 10 years and provides us with the stability to deliver these activities efficiently. It further reinforces the commitment to the submarine programme.”
It said contracts for products and services to deliver the submarine programme would continue in parallel to the foundation contract.
