The order book contracted by 15 per cent reflecting the budgetary pressures on our major customers in Europe and North America.The net order intake of £1.6 billion (2011 £1.8 billion) includes cancellations of £0.4 billion, principally the proposed cancellations of a number of contracts for C-27J aircraft, including those by the US Department of Defense.
Despite the challenging environment, we continue to see opportunities both in our traditional markets and the developing economies.
Revenue increased by eight per cent, reflecting a 12 per cent increase in OE revenue and a five per cent increase in services revenue. However, adjusted for the non-recurrence of the £60 million Strategic Defence and Security Review (SDSR) benefit in 2011, services revenue increased by 11 per cent. This highlights how our large installed base continues to provide services opportunities, as customers seek to optimise the efficiency of their aircraft. Profit increased by seven per cent. Adjusted for the SDSR benefit in 2011, profit increased by 28 per cent due to increased OE volumes and mix, growth in services, unit cost improvements and a lower R&D charge.
US$155bn - Defence engine market
US$260bn - Defence services market