Rolls-Royce sees sales growth

Like other engine suppliers, Rolls-Royce has been affected by delays in production of two airliners, the Airbus A380 and Boeing 787, crimping revenues from engine deliveries and prompting a build-up in inventory.

A drop in global passenger demand means Airbus and Boeing are heading for their worst annual order tally in 15 years as airlines cancel and defer orders, weighing on the whole aerospace supplier sector.

Industry body IATA said last month that the sector is still far from returning to profit, though air traffic demand has started recovering from the steep slump. It has said it sees the world's airlines losing $11 billion (6.75 billion pounds) this year.

Rolls-Royce, which split from the luxury car maker of the same name in 1971, said its order book continues to grow despite some minor cancellations and that it would continue to invest.

The group, which last week won a $720 million deal to supply Trent 700 engines for 10 Virgin Atlantic aircraft, also plans to proceed with a number of new operational and research facilities in the UK, Singapore and the USA.

(Editing by Tiisetso Motsoeneng and Erica Billingham)