Record numbers for Rolls-Royce

10th Feb 2011 06:57

Engine maker Rolls-Royce made slightly more money than expected in 2010 and predicts "good profit growth" this year despite cuts in UK defence spending. Underlying profit before tax rose 4% to £955m for the 12 months on underlying revenue up 7% to £10.9bn. Analysts were after a profit of around £940m.Improved revenue mix from services, good cost control, a positive currency impact and broadly similar unit costs in the gas turbine activities were behind the record numbers.But reported profits plunged 76% plunge to £702m, due in part to a £56m hit from the oil leak that caused one of its Trent 900 engines to explode on a Qantas A380 super-jumbo last year.A "modest" level of additional costs linked to the leak may be incurred in 2011, admitted the firm.Rolls also blamed the impact of period-end mark-to-market valuations on all of the outstanding financial instruments, such as foreign exchange, interest rate and fuel hedging contracts.But chief executive Sir John Rose, who stands down as chief executive at the end of next month after 15 years, was in positive mood, predicting "good profit growth and a modest cash inflow" in 2011.The final dividend increases 6.7% to 9.6p a share, making 16p for the full year.