Lancashire aerospace giant upbeat despite coronavirus challenges
Defence giant BAE Systems, which employs around 10,000 in Lancashire, expects to do better than expected after its tax bill dropped, offsetting poor exchange rates.
The company said in an official trading statement that underlying earnings per share are expected to be slightly higher than had been previously forecast. It is due to report fully early in the new year.
It said the business has seen good operational performance, and is now expecting orders to be above its pre-Covid predictions.
BAE had forecast a decline in earnings per share in the mid-single digits, but the performance now means this will be better, it said. Shares rose 1.2% on the news.
The company said: “Demand for our capabilities remains high with order intake expectations for the group ahead of our original pre-Covid planning for the year.”
The business has been boosted by a decision by German MPs to approve a 5.4 billion euros (£4.8nn) deal to buy 38 new Eurofighter Typhoon jets, which are made by a consortium including BAE and Airbus.
Chief executive Charles Woodburn said: “We have continued to deliver a resilient performance in line with our expectations for a strong second half, thanks to the outstanding efforts of our employees in these challenging times.
“From a position of strength, the actions we took in quarter two to enhance our resilience are working well as reflected in our guidance, ensuring we continue to deliver on our customer priorities, whilst keeping our employees safe.
“Demand for our capabilities remains high and we recognise our role not only in supporting national security, but also in contributing to the economies of the countries in which we operate.”
In the US, BAE said it is well-aligned with the priorities and growth areas that its customers have, something which it does not believe will change after the next administration takes over in Washington.
“The backlog for the US-based business has continued to grow organically and through the two acquisitions made earlier this year. This backlog provides good visibility of growth in the US business,” it said.
In July, the firm, which has sites at Warton and Samlesbury but also supports thousands of supply chain jobs, posted half year results of £9.871bn sales revenue in the first half of 2020, compared with £9.416bn for the first half of 2019 plus e an operating profit up to June 30 of £808m, down from £896M in 2019.
Thanks for reading. If you value what we do and are able to support us, a digital subscription is just £1 for your first month. Try us today by clicking here