Ukraine war fuels record orders of £37bn for arms titan BAE Systems
The war in Ukraine helped to boost arms and combat vehicle manufacturer BAE Systems as it reported record orders of £37bn.
The company’s sales were up 4.4 per cent in the last year to £23bn as conflict rages in Europe for the first time in decades, while Ukraine’s president recently toured the continent pleading for tanks, planes and missiles.
BAE said its revenue was up by almost nine per cent to £21bn, boosted by an order backlog of almost £60bn.
Following its results, BAE’s share price was down almost three per cent.
It said strong results were delivered despite the ongoing shadow of the pandemic, including impact on supply chain disruption, as well as inflation and labour issues.
Looking ahead to 2023, it said most countries it operates in have “either announced increases or are making plans to increase spending to address the elevated threat environment”, amid the war in Ukraine which marks its year anniversary this week.
It added that “in Europe, where the threat level is acute, the need for new equipment is most urgent and many defence budgets are rising” listing involvement in the Eurofighter Typhoon consortium, as well as shareholding in missile-maker MBDA.
BAE said in particular “that we expect the renewed importance of armoured combat vehicles in the Ukraine conflict to benefit our combat vehicles business.”
Chief Executive Charles Woodburn, said the firm had done an “outstanding job to effectively manage supply chain and inflationary pressures whilst delivering critical capabilities and driving efficiencies for our customers.”
“Our record orders and financial performance give us confidence in delivering long-term growth and to continue investing in new technologies, facilities and thousands of highly skilled jobs, whilst increasing shareholder returns”.
Brad Greve, finance director said, “our backlog is at £59bn, we’re accelerating our investment in the business and making excellent progress on our share buyback programme, which complements the proposed increase in the dividend.”
“For 2023, we’re forecasting further top-line growth, continued margin expansion.. and we’re also increasing our rolling three-year cash targets, all of which demonstrate that the business has growing momentum for the future.”