Rolls-Royce foots £56m bill for superjumbo engine failure

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The failure of the Rolls-Royce engine on an A380 superjumbo last year cost the engineering giant £56m and dragged its annual pre-tax profits down 76 per cent to £702m.

But the outgoing chief executive, Sir John Rose, said the company he has led since 1996 delivered a strong performance in 2010, pointing to underlying pre-tax profits up by 4 per cent to £955m and underlying revenues up by 7 per cent to £11bn.

The company also raised its dividend by 6.7 per cent to a total of 16p.

No one was hurt when the Trent 900 engine on a Qantas passenger jet failed in November, forcing an emergency landing in Singapore. But the blow-out led to a 20 per cent fall in profits for the civil aviation business.

"Rolls-Royce has delivered a strong performance in 2010, with record underlying revenues and profits," Sir John said. "It is a measure of progress that the Civil, Defence and Marine businesses now each generate underlying profits of more than £300m."

Sir John's replacement is John Rishton, the chief executive of retailer Ahold.