BAE Systems raises concerns over Scottish independence
Defence giant BAE Systems has announced a profit before tax of £422m for the year ended 31 December. The figure is significantly down from the £1.2bn the company enjoyed last year.
The company had a one off impairment charge this year relating to the accounting of goodwill in parts of its US business – that charge was £865m.
BAE also saw revenue fall to £16.8bn from 2012s £16.9bn. The company has been impacted by cuts to government spending in the UK and the US as well as difficult market conditions.
The defence company has also voiced its concerns with regard to Scottish independence. BAE prefaced its comments by stressing that the decision on whether Scotland should secede from the UK was matter for the people of Scotland.
BAE said in its annual report:
It is clear that continued union offers greater certainty and stability for our business. In the event that Scotland voted to become independent, we would need to discuss the way forward with the Ministry of Defence and UK government, and work with them to deliver the best solution in those circumstances.
In the event that Scotland voted to become independent, we would need to discuss the way forward with the Ministry of Defence and UK government, and work with them to deliver the best solution in those circumstances.
BAE Systems has significant interests and employees in Scotland. Last month, insurance giant Standard Life warned that it may relocate its operations to England should Scotland vote for independence.
The company highlighted the challenges posed by the sequestration measures, which cut $450bn (£272bn) from US military budgets over a ten-year period, equivalent to an approximately 10 per cent overall cut.
Ian King, chief executive, commented:
A proactive focus on costs and enhanced competitiveness allowed us to protect our margins across the majority of the business and we secured further contract wins in the US, Saudi Arabia and internationally. Our results also benefited from the satisfactory conclusion of price escalation negotiations with the Kingdom of Saudi Arabia, relating to an existing contract to supply Typhoon aircraft.