Engines giant Rolls-Royce confirmed a strong start to the year today after interim profits rose sharply and its order book reached a new record.

The world's second largest maker of aircraft engines said its recovery from the tough trading conditions of recent years had been aided by a 16% rise in revenues for post-sales services to customers.

Rolls reported half-year profits before exceptional items of £136 million, up from £115 million a year earlier, as it said all four of its divisions, including civil aerospace, had developed "good market positions".

The profits figure, which was in line with the company's expectations, was accompanied by positive news on its order book, which ended the period at a record level of £18.1 billion following an intake of £4 billion.

Rolls also said it had made progress with a modernisation programme that should contribute to a 5% reduction in unit costs in 2004.

The group has cut its workforce by 19%, or 8,300, to around 35,000 since 2001, while it is also investing more than £100 million in its UK manufacturing facilities.

Thursday July 29, 2004