- Britain’s biggest defense contractor has secured more than £30bn in orders this year
- Governments have been increasing military budgets over the past two years.
- BAE Systems said in August that it expects turnover to increase between 5% and 7% in 2023.
BAE Systems has reiterated its recently improved full-year guidance after securing around £10 billion in orders over recent months.
Britain’s largest defense contractor said in August that it expects turnover to rise by 5 to 7 percent in 2023, along with underlying profit growth of 6 to 8 percent and about £1.8 billion in cash flow. of free cash.
The FTSE 100 company, which makes the Eurofighter Typhoon aircraft, has secured more than £30bn in orders this year, with £21.1bn awarded between January and June.
Flying high: BAE Systems, which makes the Eurofighter Typhoon aircraft (pictured), has secured more than £30bn in orders this year
Other orders worth £10bn have since been awarded, including a £4bn Ministry of Defense contract to work on the SSN-AUKUS nuclear-powered submarine programme.
BAE has also received deals worth about $800 million to provide Bradley fighting vehicles and $500 million from Sweden for artillery systems.
Governments have been increasing military budgets over the past two years due to rising geopolitical tensions caused by Russia’s invasion of Ukraine and concerns over China’s claims to Taiwan.
Geopolitical tensions have risen in the wake of the war between Israel and Hamas, which has raised concerns of a broader conflict in the Middle East.
BAE’s revenue and orders have increased, with the latter reaching a record order book of £66.2 billion in June.
Charles Woodburn, its chief executive, said: “The flow of orders for new and existing programmes, current position renewals and the progress of our pipeline of opportunities remain strong.”
“This supports our confidence and visibility for good revenue growth in the coming years, and we continue to strengthen our value capitalization model with a strong focus on operational performance and disciplined capital allocation.”
BAE expects to return around £1.4bn to investors in 2023, partly through an interim dividend of 11.5p per share which it aims to pay on November 30, and partly through a share buyback plan of £1.5bn announced last year.
The company also plans to spend £4.4 billion to acquire Ball Corporation’s aerospace division to help expand its US operations and boost its presence in industries such as civil space, missiles and munitions.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘BAE occupies a key space in the defense market, and another promising upgrade demonstrates why the group is so loved in the defense space.
“With some of its largest buyers, the United Kingdom, the United States and Europe, expected to continue increasing defense budgets in the coming years, the sky really is the limit for this aircraft manufacturer.”
BAE Systems Stock They rose 0.6 per cent, or 6.5 pence, to £11.10 on Monday morning and have risen around 53 per cent in the last 12 months.