BAE remains positive despite profit ‘drop’

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BAE Systems today spoke of the aircraft industry’s “challenging environment” as it revealed a one per cent rise in sales, but a fall in underlying profits of six per cent.

Its half yearly figures showed underlying profit before tax was £865m, compared to £922m for the same period last year.

Operating profit of £750m was also down on £768m for the same period last year.

Key points include:

• Sales £8,448m

• Underlying earnings per share 17.8p

• Order backlog £43.1bn

• Non-UK and US order intake £4.8bn

• Interim dividend per share increased by 3% to 8p

Chris Boardman, Managing Director of the Military Air and Information said: “On the back of the orders from the Kingdom of Saudi Arabia and Sultanate of Oman last year there is a renewed spirit of optimism in the business and a real focus on doing all we can do to secure more export orders.

“We have several on-going campaigns for both Typhoon and Hawk and with each we have the support of the UK Government which is crucial if we are going to be successful.

“The Sultanate of Oman order for 12 Typhoon and 8 Hawk aircraft helps sustain 1,000s of jobs in the region gives us a stable base to build from and fits in with our strategy to make MAI a truly international business.

“We are continuing to support the Enterprise Zone activity at Warton, Samlesbury and in Brough, which has already helped provide employment opportunities in the area and in the future will create many more jobs.

“It’s testament to all our staff that we have managed to deliver on our commitments throughout this difficult period and managed to secure export orders.”

Around 11,500 workers are employed in the Military Air and Information division at Warton and Samlesbury, with 13,500 across the wider business.

Ian King, chief executive of BAE Systems, said: “This is a challenging environment but we continue to take the necessary actions to manage the business for the benefit of both our customers and our shareholders. We have received £4.8bn of orders outside the UK and US in the first six months, a continued sign of the momentum in international activity. We also see increasing cyber opportunities, particularly in the civil area. The Group has a well balanced portfolio with a 50/50 split between services and products and, we expect our well established, broad, geographic reach and strong product and services positions will provide a good platform for future growth.”