Rolls-Royce profits rise 21% as it pledges to double revenues
ENGINE manufacturer Rolls-Royce has announced a 21% increase in full year pre-tax profits based on a revenue rise of 4%. The company said it also had a record order book of £62.2bn, up 5%.
Pre-tax profit reached £1.157bn (2010: £955m), while underlying revenue came in at £11.277bn (2010: £10.866bn). Earnings per share were up 25% from 38.73p to 48.54p.
The group said the strong performance demonstrates the increasing resilience of its business and underpinned its confidence for the future, a position reflected in a final payment to shareholders of 10.6p per share – bringing the full year payment to 17.5p per share.
Despite the economic turmoil, the group said it expected to double revenues over the next decade through organic growth alone. The move would mirror the group’s performance during the last 10 years.
John Rishton, group chief executive, said: “Rolls-Royce performed well in 2011, and at the year-end had a record order book, record underlying revenue and record underlying profit. We continue to benefit from a broad portfolio, a large and growing customer base and access to markets where demand remains strong for our products and services.
“Our order book gives us good visibility of future revenues and demonstrates the confidence our customers have in us.”
He said there remained opportunities for profitable growth across the group portfolio. In particular, the acquisition of (German industrial engines group) Tognum, which the group has completed in tandem with Daimler, is likely to add significantly to those opportunities.
“For 2012 we expect good growth in both underlying revenue and underlying profit with cash flow around breakeven as we continue to invest in future growth,” he added.
One of the factors determining the growth ambitions is the signing of a long-term deal to develop an enhanced Trent XWB that will power the long-range Airbus A350-1000 aircraft.
Last year saw the group sell its equity stake in International Aero Engines to Pratt & Whitney. Following this, the group said its intention was to form a new joint venture to develop engines for the next generation of mid-size aircraft. This agreement builds on a long and successful partnership with Pratt & Whitney and is again likely to be a factor on growth.
In Civil Aerospace, the group said its order intake was good and accompanied strong growth in underlying revenue and profit.
“We celebrated the first commercial flight of the Boeing 787 Dreamliner powered by Trent 1000 engines. The Trent XWB engine programme for the Airbus A350 progressed well, with over 1,500 test hours completed,” it said.
“Our BR725 engine, developed for Gulfstream’s new flagship executive jet, the Gulfstream G650, is due to enter service in 2012.”
The Defence Aerospace business also performed well despite the pressure on defence spending in Europe and the United States.
It said it continued to benefit from the diversity of our portfolio and our access to emerging markets.
“Our LiftFan™ system for the F-35 Lightning II Joint Strike Fighter (JSF) continued to make good progress during intensive flight tests that included multiple take offs and vertical landings on board the aircraft carrier USS Wasp. The TP400 engine for the Airbus A400M is on course to enter service in 2013,” it said.
