Talks continue over Saudi Typhoon contract

DEFENCE manufacturer BAE Systems said trading since the start of the year has been in line with management expectations and the board’s outlook is unchanged.

In a management statement covering the period from January 1 to May 7, the group said it expects “modest growth in underlying earnings per share” this year – subject to uncertainties relating to US defence budgets.

This prediction also assumes a “satisfactory conclusion” to unresolved discussions with Saudi Arabia over the pricing of a Typhoon contract.

Jet deliveries resumed in April and talks continue. Once resolved BAE expects this contract to add 3p in underlying earnings per share.

BAE employs around 15,000 people in the North West at sites in Lancashire, Cumbria and Cheshire. The group’s biggest operations are at its military jet manufacturing facilties at Warton, where around 5,500  people and Samlesbury which employs 4,500.

It said pressure on UK government spending continues, “but the defence equipment environment remains stable with no material changes to programmes.”