AERO engines to defence business Rolls-Royce was refusing to comment on the possibility of a sale of its Vickers tank business yesterday, as it reported a nine per cent rise in pre-tax profits.

There has been talk of a sale of the firm, employing 450 staff in Newcastle, to armoured car manufacturer Alvis, but failure to win a £1bn Greek defence order could have scuppered that deal.

Vickers still hopes to win a £300m Ministry of Defence order, due to be announced by the end of the month. Success would boost employment at the Scotswood Road business beyond 1,000.

In the past year, Rolls has cut about 5,000 jobs, including 3,800 in the UK, because of the impact of the US terrorist attacks on the aviation market.

But chief executive John Rose said there were no plans for more cuts. He said: "We have a good order book and a strong market position. We don't see any additional over those set out in October."

Last year, Rolls-Royce improved pre-tax profits before exceptional items by nine per cent, to £475m, but it has confirmed that figures for this year will be hit by the downturn in the aviation market.

In its core civil aerospace business, profits are expected to be about halved.

The main UK plant is in Derby, where about 13,000 people are employed. Other sites include an aircraft engine business in Sunderland employing about 500 staff, Bristol, Coventry and Scotland.

Chairman Sir Ralph Robins said: "This was a robust performance, reflecting the benefits of the strategic changes made by management over recent years and the prompt action taken to mitigate the financial impact of September 11."

The group said it had improved its order book by ten per cent to £14.4bn.

New engine deliveries of 1,362 were the group's highest, as underlying profits rose to £347m from £332m.

, with £3bn taken in the period between September 11 and the end of the year

The restructuring programme is proceeding in line with forecasts.

During 2001, the company secured a 30 per cent share of all jet engine orders placed and maintained second place amongst the world's engine manufacturers.