BAE Systems says it remains on course for current year
Defence group BAE Systems said its outlook for the year remains unchanged, in a trading update today.
The group operates factories in Warton and Salmesbury, near Preston, building military aircraft, and a submarine building facility in Barrow. It employs around 15,000 staff in Lancashire and Cumbria.
It said, overall, it expects the group’s underlying earnings per share for 2018 will be in line with the full-year underlying earnings per share for 2017, with some small additional benefit from exchange translation.
In its UK market, it said the recently announced Budget re-emphasised the UK’s commitment to strong defence and security and the company focus remains on execution of its long-term contracted positions in air and maritime.
“The production ramp up of the F-35 (aircraft) programme is progressing well.
“On the offshore patrol vessels programme work continues to rectify the quality issues on the first ship, with lessons learned being applied to the other ships in build.
“The second ship is due to commence sea trials in November.
“The Type 26 programme is on track for the first of class contractual date in the mid 2020s and the strengthened management team in Barrow is delivering improved performance on both the Astute and Dreadnought submarine programmes.”
It said the UK-managed Applied Intelligence business remains on track to achieve a breakeven position by year end.
In the US, BAE said: “As the US-based business executes on its strong order backlog the group remains focused on meeting the challenges of rapid growth.
“Within US Platforms and Services we have further strengthened management in the combat vehicles business where necessary process and automation improvements are in preparation to meet the significant production ramp and to overcome initial issues of acceleration.
“US ship repair utilisation levels remain high across our facilities with the backlog further strengthened with the £111.52m contract award in August to modernise the USS Gettysburg.”
Reporting on its international markets, the group said the £5bn Qatar Typhoon and Hawk programme, effective in September and in the order backlog, stabilises Typhoon production into the next decade and also extends Hawk production.
It said: “Whilst a degree of geopolitical turbulence exists, the potential pipeline for Typhoon remains positive with opportunities both with partner nations and through exports.
“In Australia, work continues on negotiating the design and development scope for the Hunter Class frigate programme, with signature of the contract expected in the coming months.
“In October, the Canadian Government announced that it had selected Lockheed Martin Canada, using BAE’s Type 26 design, as its preferred bidder for the Canadian Surface Combatant programme. The bid is now in the negotiation stage.”
BAE will announce its results for the year to December 31, on February 21, 2019.
