Rolls-Royce beats forecasts

 
City A.M. Reporter
BRITISH enginemaker Rolls-Royce posted a 28 per cent rise in first-half profit yesterday, helped by a growth in engine servicing revenue and continued demand from planemakers working through hefty order backlogs.

Rolls, the world’s second-largest maker of aircraft engines behind US group General Electric, yesterday reported an underlying pre-tax profit of £595m on revenue up four per cent at £5.46bn.

The company, whose order book jumped four per cent to a record £61.4bn, said it would increase its interim dividend eight per cent to 6.9 pence.

Rolls, which makes engines for planemakers Airbus and Boeing, said it was on course to deliver higher 2011 profit, helped by its many long-term contracts to service the engines it sells to airlines and the military.

“For the full year, we continue to expect good growth in underlying profit,” said chief executive John Rishton (pictured), adding that its joint $4.8bn (£2.9bn) acquisition of German diesel engine maker Tognum with Daimler would boost the company further.

Rolls-Royce was on average expected to post a first-half pre-tax profit of £530.5m, according to analysts. It is expected to report a full-year pre-tax profit of around £1.1bn.

“Rolls have significantly beaten our expectations for the first half,” said Guy Brown at Evolution.