Rolls-Royce, the company which makes engines for aircraft, has announced a small fall in interim profits to �190m.

The figure was in line with expectations, and Rolls said it expected earnings to rise next year.

It also announced a record order book of �14.9m worth of business.

The Rolls-Royce chairman, Sir Ralph Robins, said the market for aero-engines was still 'challenging' but results next year should improve.

"We continue to expect flat underlying earnings in 2001 and target increased underlying earnings in 2002" he said in a statement.

Civil aerospace strong

Pre-tax profits for the six months to July fell to �190m from �195m in the same period last year.

The result was slightly better than analysts had forecasted. The company warned last year that profits for this year were likely to be flat.

The latest results showed a good performance from the company's civil aerospace division, with revenues boosted by the sale of after sales services for engine buyers.

Rolls said "significant success" was seen in its sale of Total Care Packages which cover repair and maintenance of its engines, with American Airlines and Continental Airlines among its customers.

The company said its defence division was looking to launch a version of these packages for its customers.