Rolls-Royce powers up Vickers profit

RUSSELL HOTTEN

Vickers, the defence and engineering group, continued its recovery yesterday with a 70 per cent leap in half-year profits, powered by another strong contribution from Rolls-Royce cars.

The company also said that it could be interested in buying VSEL's howitzer gun business which the new owner, GEC, is reported to be considering selling.

Yesterday's pre-tax profits of pounds 27m were at the top of analysts' forecasts, and came despite a flat performance from the defence equipment businesses and poor sales at the medical operation.

Although Rolls sold just 721 cars in the six months, 3 per cent up, the sales success of niche models came on top of a rise in prices and margins in the luxury car sector.

Sir Colin Chandler, the chief executive, said that Rolls would continue to focus on selling the more expensive, customised models and on the latest Bentley Azure, which was launched in March with a pounds 215,000 price tag. Sales in the Far East and in mainland Europe, particularly Germany, have been disappointing, but this was offset by stronger UK and US markets.

At the Cosworth engine division, profits were boosted by a 50 per cent rise in sales. Cosworth engines are widely-used in the US IndyCar racing programme, and have led the field in 11 out of 16 races this season, for which Vickers receives a win fee.

Vickers does not break down first-half profits, but Sir Colin was keen to stress that the propulsion technology division was doing particularly well. On the defence side, Challenger Tank production was behind much of the 49 per cent rise in turnover to pounds 501m.

Profits in the division were "holding steady" and for 1995 as a whole "could be up a little on last year".

The black spot was the medical division, which is unlikely to match last time's full-year operating profits of pounds 6m.

US sales have been hit by the government's threatened healthcare budget cuts.

After spending more than pounds 60m on acquisitions in the first half, Sir Colin said the strategy would remain the same and "we won't add on another leg" to the three divisions. The company is, however, watching the direction GEC takes with VSEL's howitzer gun business, which would fit well in Vickers' defence operations. "If they [GEC] came to the conclusion they wanted to sell it then we could be interested," Sir Colin said, but he emphasised that no formal approach had been made to GEC.

The interim dividend is raised from 1.75p to 2.4p. Shares rose 6p to 241p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Digital Marketing Exec / Online Marketing Executive

£35 - 40k: Guru Careers: Our client has a new role for a Digital Marketing Exe...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'