Orders soar as margins grow at Rolls-Royce

Marion Dakers
ENGINEERING giant Rolls-Royce was the biggest blue-chip riser yesterday after it posted a 23.5 per cent rise in underlying pre-tax profits to £1.43bn.

Rolls-Royce’s order book grew four per cent to £60.15bn last year, and revenues excluding currency changes rose eight per cent to £12.2bn.

The gains mark Rolls-Royce’s tenth straight year of profit growth.

Group margins rose from 10.7 to 12.2 per cent, and Rolls said this will improve further in 2013.

The firm, which makes the Trent 1000 engines used in some of Boeing’s beleaguered 787 Dreamliner aircraft, said the decision to ground the planes would not affect its profits this year.

“Boeing continues production so no, it won’t impact us, and I’m confident Boeing will sort the problems out soon,” chief executive John Rishton told reporters. “For the full year 2013, we expect the group to see good growth in underlying profit.”

The firm did not comment on an ongoing Serious Fraud Office probe into bribery and corruption in Indonesia and China, beyond confirming that Lord Gold is reviewing its compliance procedures.

Rolls-Royce also confirmed the appointment of new chairman Ian Davis. “Ian has experience under a raft of different circumstances,” said Rishton, noting Davis’s time at BP during the 2010 Gulf of Mexico spill.

The group ended the year with £1.3bn in cash, following its disposal of a stake in International Aero Engines, and the firm plans to “continue to invest for future growth” this year.

Shares closed 3.3 per cent higher.