|H1 2009||H1 2008|
|Underlying revenues (£m)||969||769|
|Underlying services revenues (£m)||496||441|
|Underlying profit before financing (£m)||136||104|
The Defence Aerospace business has continued to make strong progress over the period with the order book roughly unchanged at £5.4bn. There were increased deliveries in the military transport sector supporting a 44 per cent increase in original equipment revenues. Services revenues increased by 12 per cent, reflecting the utilisation of a large installed fleet and foreign exchange translation benefits.
In the military transport sector, a $222m engine contract for the V22-Osprey covering delivery and in-service support for 96 engines from 2010 was signed in the first-half, providing further evidence of the success of this programme.
Significant orders were also secured for AE2100 engines and service provision for the C130-J; a $80m contract with the U.S. Air Force to provide spare engines and parts; a $106m MissionCare™ contract with U.S. Naval Air Systems Command (NAVAIR) to provide service support; and a $23m support services and spares contract with the U.S. Air Force.
Both engine development programmes for the Joint Strike Fighter continued to make progress. The F136, a joint programme with GE for all F-35 variants, moved to engine test ahead of schedule and the LiftSystem® completed its first hover-pit testing. As in previous years, uncertainty surrounds future funding for the F136 contract and we await the conclusion of the legislative budgetary process later in 2009.
Margins have been maintained with strong volume performance and translation benefits offsetting increased unit costs and higher development spend, leading to a 31 per cent increase in first-half underlying profits.
Further strong growth in engine deliveries for the military transport and combat sectors is expected to support another year of profit growth in 2009.