Sir John Rose, chief executive of Rolls-Royce group, delivered an upbeat trading statement yesterday, saying he expects underlying sales and profits to increase in 2008 and sees all four of its businesses growing during the year.

"I can confirm that Rolls-Royce continues to make strong progress," Rose told shareholders at the company's annual meeting in London.

"The group's increasingly global nature, our access to growing international markets and the scale of our order book all support your board's confidence that Rolls-Royce will continue to deliver growth across all four of our business sectors."

He added: "2008 has started well. Order intake in the first quarter was worth almost $15bn (£7.7bn). Trading performance in this period is in line with the board's expectations. The balance sheet and the group's financial position remain strong."

He went on to say that high levels of activity in the oil and gas industry are benefiting the group's marine and energy businesses, and current activity in the defence business remains strong.

"Our civil aerospace business continues to enjoy significant order intake particularly in Asia and the Middle East. However, the credit shortage and increased fuel costs are inevitably putting pressure on the airline industry," he stated.

Rose said he was confident that Rolls-Royce, which employs 35,000 staff, would be able to cope with economic turbulence in several of its markets, particularly the United States, which is on the brink of recession.

"Looking to the future, the breadth and diversity of the group's products and services, its lack of dependence on any one programme or geographical region and the progress being made with managing costs will help the group to respond effectively to the unpredictable economic environment.

"Current trading is consistent with our expectations that we will grow underlying revenue and profit and generate a positive cash flow in 2008," Rose added.

The company will report its interim results for the six-month period ending June 30, 2008, on July 24, 2008.

Rolls-Royce makes Trent aeroengines for the Airbus and Boeing airliners as well as gas turbines and other equipment for the oil and gas industry.

In Scotland, the company has three main sites, plus a nuclear propulsion test facility and an energy systems repair and overhaul joint venture.

The combined workforce in Scotland totals almost 3000 staff and the company spends more than £50m a year with Scottish suppliers.

Investors liked the positive news from the company and propelled its shares 3.25p, or 0.7%, higher to 449.25p.