Industry NewsBAE Systems hits targets and raises growth sights for 2016

BAE Systems said that throughout 2015, there had been progressive expansion of the capabilities of Typhoon, seen as the world’s most advanced multi-role combat aircraft.

For 2015, the defence and aerospace group saw underlying earnings before interest, tax, depreciation and amortisation decline 1% to £1.68bn due to previously reported slow sales of its Eurofighter Typhoon fighter jets, though overall group sales were lifted nearly 8% to £17.9bn.

BAE Systems (BAES.L), the world’s third-largest defence contractor by revenue, forecast that annual earnings would grow by up to 10 percent this year as defence budgets recover and demand for cyber and commercial electronics grows.

He also said that the company had a full programme of work for the years ahead including the building of offshore patrol vessels and the building of eight Type 26 frigates, for which a £859m demonstration contract was awarded by the MoD last year.

However, operating profits rose £200 million on the prior year to £1.5 billion. The company hiked its dividend and flagged earnings growth this year amid prospects of higher defence spending in some of its key markets. Ian King, chief executive, said he expected the rise in sales to continue as “defence budgets recover”.

Saudi Arabia accounts for a fifth of BAE’s sales, about the same as Britain, while just over a third of sales come from North America. BAE shares rose 2 percent to 509.5 pence at 8:19 a.m.in London.

It is also expanding into provision of cyber security for major corporations, including banks and telecoms.

Let’s hope Charles Woodburn, BAE’s chief executive in waiting, doesn’t suddenly decide he has a “transformative deal” in him when he takes the helm.

In its statement the company said it had delivered another year of “solid performance” and “resilience in markets constrained by wider economic pressures”.