Rolls-Royce makes £1 billion

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Friday, February 10, 2012
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The Bristol part of engineering giant Rolls-Royce played a big part in the firm’s huge success over the last 12 months.

The company announced record annual profits of more than £1 billion yesterday and added it was confident of even more growth over the coming year.

The firm – which employs just under 4,000 people at its Patchway factory – currently has an order book of £62.2 billion, largely fuelled by the demand and growth in civil aerospace.

In Bristol the company specialises in making engines for military planes and the turbines which power large ships including the two new super-carriers currently being built for the Royal Navy.

As a result of the military action in Libya last year the amount of servicing work carried out at the Bristol factory increased.

Announcing profits of £1.16 billion and revenues of £11.3 billion, chief executive John Rishton said the business performed well in 2011 despite the tough economic conditions.

He added: “Our order book gives us good visibility of future revenues and demonstrates the confidence our customers continue to have in us.”

A year ago, the company’s results were badly affected by the mid-air failure of one of its Trent 900 engines on a Qantas A380 superjumbo.

As a result of the safety scare the firm took a £56-million hit on its profits.

However, the civil aerospace division appears to have weathered the storm after its order book increased by seven per cent to £51.9 billion, a workload which includes more than 5,000 new engines.

Much of the increase is due to the incredible popularity of the Airbus A320 aircraft.

Profits in the commercial division increased by 27 per cent to £499 million due to higher volumes and improved productivity. Rolls expects the operation to see it profits increase even more this year, alongside more modest improvements in its defence, marine and energy arms.

The pressure on Government budgets meant the order book in defence fell by seven per cent to £6 billion but Rolls said the £1.8 billion of new business achieved in the year demonstrated there were still opportunities for growth.

Dan Korte, who is in charge of the Bristol operation, said: “Today’s results show the benefits of our broad and wide ranging product portfolio and large global customer base in a time where defence budgets face major challenges across the globe.

“In addition we have demonstrated that our technologies in both engines and services can make a big difference to customer operations.

“There have been some great achievements from the Bristol Defence team over the past year, including the outstanding support for the UK’s operations in Libya and an excellent year of testing for the vertical take-off version of the new Joint Strike Fighter, and I’d like to thank everyone for their hard work.”

As a result of the work in Libya Rolls-Royce received a letter of thanks from the Ministry of Defence.

Peter Luff, the minister in charge of defence equipment, said: “Rolls-Royce worked jointly with BAE Systems and QinetiQas well as providing the information to support the clearance of air-to-air refuelling from coalition tanker aircraft.

“When operations in Libya commence, Rolls-Royce had just implemented a rolled-back support solution for the aircraft engines. Rolls-Royce maintained outstanding support to the front line.”

Rolls-Royce completed one of the biggest deals in its history last year when it joined forces with Mercedes-Benz owner Daimler to acquire German engine maker Tognum for £3 billion. Rolls will combine Tognum with its own Bergen business, which makes engines used across the maritime and power generation sectors.

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