BAE Systems raises full year guidance amid ongoing geopolitical tension
BAE Systems upped its full year guidance and hiked its interim dividend off the back of a bumper half year trading update which saw healthy jumps in revenue and profit.
The London-listed defence firm, which has benefited from the twin tailwinds of rising geopolitical tension and the prospect of a Trump presidency withdrawing Nato support, saw a 13 per cent year-on-year rise in revenue in the six months to June 30 from £12bn to £13.4bn.
Half-year profit also rose five per cent from £1.2bn to £1.3bn, leading the firm’s board to declare an interim dividend of 12.4p, an eight per cent rise on the bung to shareholders announced in the first half of 2023.
An order book indicating “high” demand meant the firm also increased its sales guidance for its full year results, upping its expectations by 200bps.
The Farnborough-based defence giant also raised guidance on underlying earnings before investment and tax by 100bps, expecting it to grow by between 12 to 14 per cent, compared to previous estimates of between 11 and 13 per cent.
The rise in guidance was thanks in part to the blockbuster £4.4bn mega deal it struck for US space firm Ball Aerospace, which was given the green light in February.
The acquisition, which is BAE Systems’ first major foray into the space sector, also helped massage the defence giant’s order book, which is now at a record level, the firm said.
Charles Woodburn, BAE Systems‘ chief executive, commented: “Thanks to the outstanding efforts of our employees around the world, we delivered a strong operational and financial performance in the first half of the year, giving us confidence to increase our year-end guidance across all our key metrics.
“Working closely with our customers, we have maintained momentum on key strategic activities, including AUKUS and the Global Combat Air Programme.
“We also continued evolving our technology portfolio through strategic acquisitions and the ongoing integration of our new Space & Mission Systems business.”