Record sales and profits lift Rolls

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Sir John Rose, the chief executive of Rolls-Royce, said he saw no end in sight to the boom in the civil aerospace market as the aero-engine maker announced record sales and profits last year

Turnover exceeded £7bn for the first time in Rolls' history while underlying profits broke through the £700m mark, helped by a record order book and rising deliveries of civil aircraft.

"No one cycle is the same as the last and today the world into which airliners are being sold is much more international," Sir John said. "There is significant growth in Asia and the Middle East, the order books of the airframe makers remain very robust and deliveries are continuing to rise."

The installed base of Rolls engines has risen to 54,000 and revenues from after-market sales - where the company makes the bulk of its profits - again accounted for more than half the group total last year.

Sir John also shrugged off the idea that an environmental backlash against air travel could slow the company's growth. He said that, if anything, it would out a premium on new aircraft with more fuel-efficient engines and lower carbon emissions, which could drive sales even higher.

Underlying pre-tax profits were up 19 per cent to £705m, despite an £85m hit from the weak dollar, while there was a £491m cash inflow during the year.

All of the group's divisions reported an improvement in performance, bar energy where a £1m profit turned into an £18m loss due to a £22m investment in fuel cells technology.

Andrew Shilston, the finance director, said Rolls was "fairly close" to an agreement to tackle its £1bn pension fund deficit by closing its existing final-salary scheme to new members.