Defence giant sees orders soar due to global security concerns

Typhoon jets

Heightened global security concerns have helped defence group BAE Systems post record annual results and order books.

The group saw sales jump 4.4% in the year to December 31, 2022, to £23.256bn.

Its order intake soared from £21.458bn to £37.093bn, while its order backlog stood at £58.9bn, up from £44bn the previous year.

BAE’s operating profit was £2.384bn, compared with £2.389bn a year ago.

Free cash flow of £2bn exceeded expectations.

The group’s total dividend has been increased by 7.6% to 27p per share.

BAE Systems 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. In December last year the defence giant launched a drive to recruit 2,600 apprentices and graduates across the group.

The group said: “In 2022, global events resulted in a renewed recognition of the importance of the defence industry and our role in assisting governments in protecting their countries and citizens.”

Chief executive, Charles Woodburn, said: “We’ve delivered another year of strong results across the group.

“Our employees have done an outstanding job to effectively manage supply chain and inflationary pressures whilst delivering critical capabilities and driving efficiencies for our customers.

“Our diverse geographic footprint, deep customer relationships and highly relevant, leading defence technologies mean we’re well positioned to support national security requirements in an elevated threat environment.”

He added: “Our record orders and financial performance give us confidence in delivering long term growth and to continue investing in new technologies, facilities and thousands of highly skilled jobs, whilst increasing shareholder returns.”

Brad Greve, group finance director said: “We’ve delivered sales, underlying EPS and free cash flow all above guidance which is a testament to our people and their continued, long term focus on operational excellence.

“Our backlog is at £59bn, we’re accelerating our investment in the business and making excellent progress on our share buyback programme, which complements the proposed increase in the dividend.

“For 2023, we’re forecasting further top-line growth, continued margin expansion, higher EPS and we’re also increasing our rolling three-year cash targets, all of which demonstrate that the business has growing momentum for the future.”

Looking ahead to the current financial year, the group said it anticipates sales will rise between three and five per cent, while underlying earnings before interest and tax are expected to improve by between four and six per cent.

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