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BAE profits tumble after truck deal loss

BAE Systems swung to a loss last year after a major writedown linked to its purchase of US military group Armor Holdings.

The British defence company said it suffered a net loss of £67m in 2009 compared with profit after tax totalling £1.745bn in 2008.

BAE said it was forced to writedown £973m after Armor lost the truck deal.

Two weeks ago the company suffered a further blow when it agreed to pay the Serious fraud Office £30m to settle bribery claims.

It also paid the US Department of Justice a $400m (£255m) fee after pleading guilty to one charge of making false statements to the US Government.

But the company said in an upbeat statement said that pre-tax profits before exceptional charges – including the fines – rose by 17 per cent last year, to £2.2bn.

BAE’s sales rose by 21 per cent on 2008, to £22.4bn, and the group also said that it would start a £500m share buyback programme in 2010, during which it expects to grow further.

BAE also increased its annual dividend by 10 per cent to 16p per share following yesterday’s results.

Investors reacted positively and BAE shares closed up 4.3 per cent at 364p.

Earlier this month the defence company announced 230 job cuts at its Barrow-in-Furness submarine site in the UK, bringing total job losses to more than 2,500 since the start of 2009.