DEFENCE company BAE Systems said yesterday government spending cuts in the UK and the US are forcing it to do more deals with other countries including Saudi Arabia to stop its revenues tumbling.
BAE warned in its full-year results yesterday that 2011 sales will be lower than last year, with US contracts worth £1.6bn coming to an end.
“The group seeks to… develop new business in support of all Saudi military and paramilitary forces” as well as throughout India and Australia, BAE said in a statement.
The FTSE 100 company said cost savings following the UK’s strategic defence review will cost BAE 1p per share per year.
BAE’s pre-tax profit for 2010 was £1.49bn, compared to a £61m loss in 2009, on revenues up 1.8 per cent to £22.4bn.
The 2009 losses mostly stemmed from £1bn-worth of impairment charges after the US Army cancelled a trucks contract, and a £278m charge to settle a long-running fraud investigation in the UK and the US.
BAE said discussions were still ongoing with US authorities on “concerns regarding matters arising from the settlement,” but refused to give further details.
Chief executive Ian King said the firm welcomed the UK Bribery Act, “which in many ways reflects the new procedures we already have in place”.
BAE’s shares fell 4.2 per cent.