BAE Systems lifts forecasts amid high defence spending

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Andrew Feinberg

White House Correspondent

BAE Systems has hiked its guidance for the year as heightened geopolitical tensions have caused nations to increase defence spending.

Shares in the business were higher on Thursday morning as a result.

The FTSE 100 defence giant said its order numbers grew on the back of “high” demand globally.

BAE told investors that sales grew by 13% to £13.4 billion for the six months to June 30, compared with the same period a year earlier.

It said sales were boosted by strong defence spending in key market as customers sought to address “the rising threat environment”.

The company also highlighted that sales growth was lifted by its £4.4 billion acquisition of US defence firm Ball Aerospace.

BAE also reported that its order book at the end of June had increased by £1.6 billion to a total of £59.6 billion.

As a result, it said it now expects sales growth of roughly 14% for 2024, upgrading from a previous prediction of 12% due to the “continued strong operational performance across all sectors”.

Meanwhile, BAE also reported an operating profit of £1.3 billion for the latest half-year, up 5% year-on-year.

The group also lifted its earnings growth forecasts by one percentage point to a range of between 12% and 14% for the year.

Charles Woodburn, chief executive of BAE, said: “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.

“Our order intake shows that demand for our products and services remains high and we are well positioned for sustained growth in the coming years.

“We will keep investing in new technologies, facilities and our people so that we can deliver on our record order backlog and help our government customers stay ahead in an uncertain world.”

Analysts at Jefferies has said the half-year performance was “slightly ahead of expectations”.