Booming first half for Rolls-Royce

A SUCCESSFUL contribution from its German industrial engines operation has helped to boost the first half for Rolls-Royce.

It is the first time that Tognum has been able to impact the group’s results since its full integration into the business.

Including the Tognum contribution, the group’s order book increased by 15% during the first half of 2013 to £69.2bn (H1 2012: £60.bn). Excluding Tognum the increase would have been 12%.

Underlying revenue in the first increased to £7.3bn (H1 2012: £5,757m), a rise of 27%, while underlying pre-tax profit rose 34% to £840m (H1 2012: £628m).

The manufacturing giant employs around 1,000 people at a factory in Barnoldswick, Lancashire, where turbines for some of its engines are made.

Underlying earnings per share rose by a similar margin to 33.33p (H1 2012: 26.22p) with the group dividend rising 28% to 8.6p (H1 2012: 7.6p).

The group said the period had also seen the first flight of the Trent XWB-powered Airbus A350, which offered major opportunities for future growth.

Gross R&D investment increased by 30%, of which 19% is due to consolidation of Tognum.

John Rishton, Rolls-Royce chief executive, said: “Results in the first half show good progress against some of our priorities, as well as highlighting the need for further action in others. In terms of delivery on our promises, we were delighted to take management control of Tognum after nearly two years; the whole organisation was excited by the first flight of the Airbus A350 powered by our Trent XWB engines and we made good progress on our customer initiatives.

“While underlying profits were up 34%, primarily reflecting volume and the benefit from the IAE restructuring, it is clear we have a lot more to do on cost (and cash). Fortunately we have significant opportunities to improve both, but this will take time and firm resolve to deliver.

“We maintain our full year guidance for the group.”