Aircraft engine maker Rolls-Royce said an investment drive would reduce cash flow to break-even this year as it forecast “good growth in underlying revenue and underlying profit” during the rest of 2012.
Reporting quarterly trading in line with targets, the group said that since February, its Trent XWB engine had taken to the skies for the first time for a test flight on an Airbus A380, while it had also opened new manufacturing facilities in Singapore.
The site will be used to build wide chord fan blades, which are used to suck air into jet engines, as well as to assemble and test large commercial jet engines.
Rolls-Royce has done better than most of its rivals in coping with the squeeze on defence budgets precipitated by the economic downturn.
The company said this year that it planned to double its revenues within the coming decade, and has recently been buoyed by a series of contract wins.
At the end of April, the company signed a contract worth as much as $598m to supply engines for the US Marine Corps and Air Force’s V-22 tilt rotor aircraft.
On May 1, it announced a contract worth $315m from Pratt & Whitney to supply the Rolls-Royce LiftSystem for 17 F-35B Lightning II aircraft.
Rolls-Royce is the only company in the world to make the technology that enables F-35B to perform the vertical landings that are a crucial part of the aircraft’s flexibility.
The company has benefited from a strong performance by Tognum, its marine and industrial engine joint venture with Daimler.
Although shares in the FTSE 100 company were down 6p at 853p in early afternoon trading in a declining London market, they remain within range of the all-time high of 863p reached on May 2.