Rolls-Royce posts 24 per cent jump in full-year profits

Aerospace giant Rolls-Royce, the world's second-largest maker of aircraft engines behind US group General Electric, bounced back with a strong performance much to the delight of investors yesterday as it announced its key civil aerospace business had propelled it to a 24 per cent jump in full-year profits.

Two months following the business warning it could face bribery and corruption charges in China, the group unveiled a £1.4-billion profit for last year, with  revenues increasing 8 per cent to £12.2 billion. Rolls-Royce whose aircraft engines are used to power a takeoff or landing every 2.5 seconds, reported a 16-per cent increase in revenues at its civil aerospace business, on soaring demand for more fuel-efficient engines for planes made by Airbus and Boeing.

The group hiked its dividend 11 per cent to 19.5p a share with chief executive John Rishton saying this year the group expected modest growth in underlying revenue and good growth in underlying cash flow.

However, even with strong results, Rolls-Royce continues to be under a cloud, due to the findings of an internal inquiry into possible bribery and corruption by intermediaries in China, Indonesia and other overseas markets that it passed to the Serious Fraud Office. According to the company, the SFO investigation was ongoing.

The company said it did not expect the grounding of Boeing's Dreamliner jet to affect profits.

"Boeing continues production so no, it won't impact us, and I'm confident Boeing will sort the problems out soon," chief executive John Rishton told reporters. "For the full year 2013, we expect the group to see good growth in underlying profit."

The aerospace group posted a record underlying pre-tax profit of £1.43 billion pounds for 2012.

The result came as Rolls' 10th straight year of profit growth.