Rolls-Royce profit up on fuel-efficient jet demand

Rolls-Royce posted a better-than-expected 7 per cent rise in first-half profit, driven by airlines' need to renew ageing fleets with more fuel-efficient planes.

Rolls, the world's second-largest maker of aircraft engines behind General Electric, on Thursday reported an underlying pretax profit of £637m for the six months to the end of June on revenues 5 per cent higher at £5.8bn.

The company, which makes engines for planemakers Airbus and Boeing, raised the interim dividend by 10 per cent to 7.6 pence per share and said it expected to deliver further growth in 2012.

"For the full year, we continue to expect good growth in underlying profit with cash flow around breakeven, excluding the positive impact of the Tognum acquisition and the sale of our equity stake in IAE," chief executive John Rishton said.

Rolls was expected to post an average pretax profit of £615m for the first six months of 2012, according to an analyst poll, which predicts it will deliver £1.43bn of profit in the full-year.The company said its order book rose 4 per cent to £60.1bn during the period.

Rolls, which has more than 5,000 engines worth around £50bn on order, said revenues at its main civil aerospace unit rose 17 per cent in the last six months.