“Across our markets, governments remain committed to increasing defence spending and we continue to see significant opportunities for growth across all our key markets and domains.”

BAe Systems, the defence giant which employs around 13,700 people in Lancashire, has revealed it’s 2026 trading results.

Chief Executive Charles Woodburn has announced a ‘strong financial and operational performance’, which has seen £33bn of orders secured so far and free cash flow up by £1bn to around £3bn.

Compared to last year, sales have gone from +8 per cent to +10 per cent, underlying EBIT (Earnings Before Interest and Taxes) is up from +10 per cent to +12 per cent, and underlying EPS (Earnings Per Share) has risen from +11 per cent to +13 per cent.

Mr Woodburn said: “We've delivered strong financial and operational performance year to date, as well as positive order intake momentum. Our substantial backlog provides good visibility and, with our portfolio aligned to evolving threats and customer priorities, we remain well positioned to deliver sustainable growth over the years ahead.”

The Typhoon on the runway at BAe Systems, Warton | BAe Systems

placeholder image — The Typhoon on the runway at BAe Systems, Warton | BAe Systems

A report issued today states: “The Group is trading well in the second half of the year so far. Consistent with the first half, strong trading in our Electronic Systems, Air and Platforms & Services sectors has more than offset subdued growth and margins in our Maritime sector as we progress through the first-in-class stage of the Type 26 frigate programme.”

Increased Government defence spending

It adds: “Across our markets, governments remain committed to increasing defence spending and we continue to see significant opportunities for growth across all our key markets and domains. Our substantial backlog of secured work provides good visibility, while the alignment of our portfolio to customer priorities and evolving threats positions us to deliver growth across a range of government defence spending outcomes.

“In the US, our portfolio is strongly aligned with defence and intelligence focus areas. Examples include our munitions production, where we support 10 of the 12 programmes prioritised for significantly increased production capacity, and space, where our capabilities play essential roles in missile warning and tracking programmes to protect the nation and its armed forces.

“In the UK, the Defence Investment Plan reinforces investment across both our long-term programmes and future capabilities, including next-generation fighter jets, autonomous collaborative combat aircraft and other advanced technologies.

“In Europe, continued growth and visibility are supported by rising defence investment and our exposure to multiple priority capability areas, including missile and air defence systems, land vehicles and combat air.”

Balance sheet and capital allocation

BAe say the strong financial position enables them to investment in the business to support organic growth, pay dividends to shareholders, explore value enhancing acquisition opportunities and execute their share buyback programme.

Total cash returned to shareholders in 2026 is expected to be around £1.6bn, comprising the final dividend for 2025, the interim dividend for 2026, which will be paid on December 2, 2026, and around £500m of share repurchases.