Rolls-Royce, the aero-engine and industrial power group, reported a sharp rise in profits yesterday as the company forecast that the airline industry was at last picking up after five years of recession.
After reporting a 74 per cent jump in pre-tax profits to pounds 175m for last year, chairman Sir Ralph Robins said that the company was seeing growth in its important markets and had captured a greater share of the commercial engine market.
There has been speculation that R-R was selling its big Trent engine at below cost in order to win lucrative spares sales, but Sir Ralph denied this.
R-R said it was closing the gap on rival US engine-makers General Electric and Pratt & Whitney. R-R captured nearly 30 per cent of all commercial aircraft sales last year, the highest market share it has achieved.
"We have had five years of very difficult circumstances when we have had to pursue some very difficult policies. But we are beginning to get the pay off now and we are starting to see market growth," he said.
The profits included a pounds 30m contribution from US aircraft-engines company, Allison, which R-R bought early last year. There was an exceptional gain from asset sales of pounds 32m.
Since last year, R-R has steadliy won engine orders and seen a rise in its share price, up 5p yesterday to 215p. Group sales were pounds 3.6bn, up from pounds 3.16bn.
The company warned it faces a downturn in military projects but said the civil aviation industry was showing signs of recovery.