Rolls Royce Profit Keeps Climbing

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Rolls Royce (LSE:RR.) turned in an astounding 24% increase in pre-tax profit on a 9% increase in revenue.   The reported full year profit of £1,429 million is not only up £272 million from £1,157 million in 2011, it is also the 10th year in a a row that the firm has recorded increased profits year-on-year.

© Image copyright elaws

Revenue for the year was £12,161 million versus £11,124 million in 2011.  EPS increased from 48.54 pence in 2011 to 59.27 pps in 2012.  Shareholder dividends were increased by 11% over last year’s 17.5 pence to 19.5 pps in 2012.

More good news came from CEO John Rishton, who noted that “The strength of our order book demonstrates the confidence our customers have in our products and services.  Our priorities remain: delivering on the promises we have made, deciding where to go and where not to, and improving financial performance.”  The order book at year end was £60,146 million, up 4% over 2011 year end.

Rishton was probably more than happy to be reporting these stellar results as it was only two months ago on 06 December that he had to publicly respond to allegations of fraudulent activities in Indonesia and China.  Although the the claims involved intermediaries, nonetheless they gave Rolls a black eye.  Rishton, however, was stalwart, saying, “I want to make it crystal clear that neither I nor the Board will tolerate improper business conduct of any sort and will take all necessary action to ensure compliance.  This is a company with exceptional prospects and I will not accept any behavior that undermines its future success.”

Rishton said that the outlook for 2013 continues to appear on target, but with cash flow being a bit of concern.  The public has been concerned about a hug potential loss of business as a result of the grounding of the Boeing 787 Dreamliner aircraft for which Rolls supplies the engines.  Boeing’s orders are still in place while production continues on building the entire fleet as expected.

In a separate announcement, Rolls advised that Sir Simon Robertson will be stepping down from his position as the chairman of the company effective at the end of the AGM scheduled for 02 May 2013.  He will be be replaced by Ian Davis, who currently serves on the boards of BP and Johnson & Johnson.

As of 2:45 pm, Rolls’ share price had risen to 999.5, up 15.0 pence and 1.52% on the day.

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