Rolls-Royce profits soar

Tarnished aerospace giant Rolls-Royce gave investors a boost today as it announced a strong performance at its key civil aerospace business propelled it to a 24% jump in full-year profits.

Two months after the business warned it could face bribery and corruption charges in China, the group unveiled a £1.4 billion profit for last year, as revenues increased by 8% to £12.2 billion. Rolls-Royce whose aircraft engines are used power a takeoff or landing every 2.5 seconds, benefited from a 16% rise in revenues at its civil aerospace business, on the back of soaring demand for more fuel-efficient engines for planes made by Airbus and Boeing.

The group increased its dividend by 11% to 19.5p a share and chief executive John Rishton said “this year, we expect modest growth in underlying revenue and good growth in underlying cash flow”.

But despite strong results, a cloud hangs over Rolls-Royce, which has passed the findings of an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets to the Serious Fraud Office. The company said the SFO investigation was ongoing.

Rolls-Royce also announced it had appointed BP non-executive director Ian Davis as its new chairman today, as it steps up its response to those allegations. Davis will take over on May 2, when Sir Simon Robertson steps down after eight years. Rolls-Royce also confirmed it had hired lawyer Lord Gold to review the company’s compliance procedures.