Rolls-Royce today announced a jump in operating profits to £96 million.

But the costs of the firm's decision to pull out of large steam power generation wiped out the gains and left it with £169 million losses in the six months to June 30.

The firm, which employs more than 800 at its Barnoldswick aero engine component site, said the results showed the "underlying strength of its continuing businesses".

"Our decision to withdraw from large steam power generation recognises the need to focus upon these businesses where we have established or can establish leading market positions," said Sir Ralph Robins, chairman.

"We are strengthening our competitive position through the development of new products, and through increased productivity which leaves us well-placed to compete for business anywhere in the world."

Total turnover, excluding the steam power businesses, rose to £1.77 billion from £1.49 billion as a result of the recovery in both the aerospace and industrial power markets. Shareholders will see their interim dividend unchanged at 2p while the loss per share of 12.27p compared with earnings of 4.32p in 1995.

Rolls said its order book stood at £7 billion at the half-year, up from £6.5 billion a year earlier, adding that a further £800 million of new business had been announced but not yet signed.

It said that both the civil and defence divisions of its aerospace group made "good progress" in the first half.

Sales rose to £1.29 billion from £1.04 billion

while operating profit rose to £77 million from £46 million.

Rolls-Royce today said it had won an order worth up to £300 million to power a batch of Tupolev aircraft ordered by the Kato Group of Egypt.

The order is for RB211-535 engines, for which the Barnoldswick site makes wide chord fan blades and front bearing housings.

The contract with Kato covers engines for 13 firm and 17 optional aircraft ordered by the Cairo-based concern, one of Egypt's largest and most diverse private industrial companies.

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