Shoreham-based engineering group Ricardo showed it was steering through tough conditions in the automotive industry with a jump in profits.

The company, which helps major car makers develop engines and transmission systems, said demand was reaching record highs despite the economic gloom.

Pre-tax profits in the six months to December 31 rose 12 per cent to £7.6 million, with Ricardo's order book up by 15 per cent to more than £57 million.

Chief executive Rodney Westhead said the group had benefited as manufacturers looked for advice on how to improve the fuel efficiency of their vehicles.

He added more work was being outsourced by the major players in the current climate, particularly in the United States.

But Mr Westhead said the success of models such as the new Mini, powered by a Ricardo transmission, showed the public still wanted to buy new models.

He said: "Despite some pressure on margins, we expect performance for the full-year 2002 to be on track."

Ricardo, based at Shoreham airport, formed a new motorsport division in November to grow its share of a £4 billion industry.

The division developed the gearbox in the Volkswagen that broke the 24-hour land speed record.