- Rishi Sunak said the UK would increase defense spending to 2.5% of GDP by 2030
- The US recently approved $61bn (£49m) of aid to Ukraine.
BAE Systems expects “additional positive momentum” driven by the recent US military aid package to Ukraine and the UK government’s commitment to increase defense spending.
Prime Minister Rishi Sunak said last month that the UK would increase defense spending to 2.5 percent of GDP by 2030, helping the country combat an “axis of authoritarian states” such as Russia, Iran and China.
At the same time, the United States approved $61 billion (£49 billion) of assistance to Ukraine, including missiles and ammunition, as part of a broader deal that also delivered weapons to Israel and Taiwan.
Flying: BAE Systems, which makes the Eurofighter Typhoon aircraft (pictured), has received a significant increase in orders from countries increasing defense spending.
Global defense spending has increased in recent years, reaching an all-time high of $2.44 trillion in 2023, amid rising tensions in Asia, the Middle East and Eastern Europe.
As a result, companies such as BAE Systems, which manufactures the Eurofighter Typhoon aircraft, have received a significant increase in orders.
In March, the Australian Government selected FTSE 100 company and shipbuilder ASC Pty to build and operate nuclear-powered submarines under the AUKUS agreement.
BAE also recently won deals worth $754 million to produce multipurpose armored vehicles for the US military, more than $690 million to upgrade the Danish fleet of CV90 infantry vehicles, and up to $182 million from the US National Geospatial-Intelligence Agency
To achieve this output, the group plans to hire a record 2,700 apprentices, graduates and university students in the UK this year.
Charles Woodburn, CEO of BAE Systems, said: “We continue to meet mission-critical requirements for our customers and advance our long-term strategic programs within the elevated threat environment.
“Our global presence and diverse portfolio of products and services provide high visibility for revenue growth, margin expansion and cash generation in the years ahead.”
For the full year, BAE expects revenue to rise by 10 to 12 per cent on the £25.3 billion earned in 2023, while underlying profits will grow by 11 to 13 per cent.
The company also announced that its Space & Mission Systems business, formerly Ball Aerospace, is off to a “good start” for 2024 after securing multiple contracts.
BAE completed its £4.4bn acquisition of Ball Corporation’s aerospace division in February, giving it a greater presence in the civil space, missiles and munitions sectors.
BAE Systems Stock They rose 0.6 per cent to £13.90 on Thursday morning and have risen around 172 per cent in the last three years.
