Defence spending curbs dent BAE sales
BAE Systems, the defence group which is one of the region’s largest private sector employers, said its first-half sales had fallen 10% to £7.6bn.
BAE. which has two major aviation factories in Lancashire, a shipbuilding site in Barrow, Cumbria, and munitions factory in Cheshire, said profits rose up £10m to £541m in the period.
The company said that it continues to feel the pressure of reduced military spending in the UK and US, with defence budgets in the countries “constrained”.
Chief executive Ian King, said: “Operationally, the group continues to perform well, benefiting from good programme performance on its large order backlog of almost £40bn.
“We continue to see a high level of activity in international markets, including from our substantial presence in the Kingdom of Saudi Arabia, while the US and UK environments remain more constrained.
“Sales are anticipated to be weighted towards the second half of 2014, including the timing of Typhoon aircraft deliveries. We are finalising a further £1.3bn of international orders and are at an advanced stage of negotiations on a further £1bn of UK sole source naval contracts.
“Excluding the impact of exchange translation, the group remains on track to deliver earnings in line with our expectations for the full year.”
The company added that its outlook for the full-year was unchanged, having warned in February that earnings would fall by 5pc to 10pc year from the £1.9bn it made in 2013, a figure boosted by the agreeing the price of sales of to Saudi Arabia, including a deal to supply the Gulf nation with Typhoon fighter jets, which are assembled and tested in Lancashire at its Warton site north of Preston.
