Insider Media Limited

Derby-based manufacturing giant Rolls-Royce has revealed that the failure of one if its superjumbo engines cost the company £56m. Through its full-year report published this morning, Rolls-Royce the underlying pre-tax profit of its civil aerospace division had dropped from £493m in 2009 to £392m in 2010. However, the wider group experienced some growth, with underlying pre-tax profits up 4 per cent to £955m.

The group’s defence aerospace division grew from £253m in 2009 to £309m, while the marine sector experienced a leap from £263m to £332m. Rolls-Royce’s energy division also increased profitability, with an increase of £3m in the year-long period to £27m.

Rolls-Royce said the failure of one of its Trent 900 engines on a Qantas superjumbo last year had incurred a £56m charge.

The company said that most of the associated costs had now been taken into account, although further "modest" costs may occur this year.

Despite difficulties in its civil aerospace division, the company said its order book remained “strong” at £59.2bn. This is a slight increase on the 2009 result of £58.3bn, having booked £12.3bn over the last year.

Thanks to positive performances in Rolls-Royce’s other divisions, revenues also increased to £11,085m. This is up on the company’s 2009 result of £10,414m.

However, profit before financing dropped to £1,134m in 2010, down from £1,172m in the year previous.

Sir John Rose, chief executive of Rolls-Royce, also announced that he would be stepping down from his position. John Rishton will take over the post of chief executive at the end of March.

Sir John said: "Rolls-Royce has delivered a strong performance in 2010 with record underlying revenues and profits. This reflects our global customer base and the balanced portfolio of products and services that we offer. It is a measure of progress that the civil, defence and marine businesses now each generate underlying profits of more than three hundred million pounds. During 2011 the group expects good profit growth and a modest cash inflow.

"At the end of March I will retire as chief executive of Rolls-Royce after 15 years. It has been an extraordinary privilege to work with so many outstanding people and to contribute to the development of a business that has been at the forefront of engineering and technology for over 100 years.”