ENGINE-MAKER Rolls-Royce reported a four per cent rise in underlying annual pre-tax profit to £955m yesterday, and told investors most of the costs linked to last year’s A380 engine problems have been dealt with.
The results announcement was the last for chief executive Sir John Rose, who retires next month and will be replaced by former Ahold boss John Rishton.
“The view for 2011 is that we’ll continue with good growth in underlying profit, supported by services growth in the civil aerospace and marine sectors,” said Rose yesterday.
Revenues rose six per cent to £11.1bn, and the firm raised its final dividend 6.7 per cent to 9.6p.
Operating profits fell slightly as £56m costs linked to the A380 engine, which malfunctioned on a Qantas plane last year, were absorbed.
PROFILE | SIR JOHN ROSE
AT the end of yesterday’s analysts’ briefing on the Rolls Royce results, Sandy Morris of RBS, the doyen of the aerospace sector, stood up and gave a vote of thanks to Sir John Rose, one of British industry’s iconic figures. Applause from the 60-odd analysts present followed.
It was a fitting tribute to a man who has led the company as chief executive since 1996 and whose reign has in the main been an outstanding one.
True, the last few months of Sir John’s tenure were marred by the failure of the group’s Trent 900 engine on an Airbus plane, but as industrial catastrophes go this was a manageable one, if there can ever be such a thing.
Mercifully there were no human casualties related to the failure and after a few days of unhelpful headlines the group has come out the other side with its reputation intact. This was no BP-style disaster.
Under Sir John’s stewardship Rolls-Royce became a truly global player, with an order book that has grown from £7.6bn in 1995 to £58.3bn now and a share price that has grown from 188p to 645p.
One would imagine the government will be keen to use Sir John’s services as it strives to find a convincing growth strategy for the UK economy. Business Secretary Vince Cable speaks of Sir John’s “huge contribution”. At Rolls, he will be a hard act to follow.