BAE hikes forecast for the year as war in Ukraine continues to drive record orders

BAE Systems has hiked its forecast for the year as the war in Ukraine continues to drive record orders.

Britain’s biggest defence company won a record £21.1billion of new orders in the first six months of the year, thanks to the booming demand for submarines and fighter aircrafts.

BAE’s order backlog hit £66.2billion – a record for the FTSE 100 group, which builds Eurofighter Typhoon jets, nuclear submarines and combat vehicles as well as making ammunition for the Army.

Since Russia invaded Ukraine last year, demand for weapons and equipment has soared as western allies support Ukraine and shore up their own stocks.

In the Asia-Pacific region, growing threats, such as Chinese claims on Taiwan, are also driving defence spending.

Sales in the first half jumped 11 per cent to £12billion, while profits soared 10 per cent to £1.3billion.

‘Defence and security is moving up national agendas,’ said Charles Woodburn, BAE chief executive. 

The firm now forecasts that earnings per share would grow between as much as 12 per cent this year, double what was previously predicted.

The board also announced plans for a share buyback worth £1.5billion.

‘With a record order backlog and good operational performance, we’re well positioned to continue delivering sustained growth in the coming years, giving us confidence to continue investing in new technologies, facilities, highly-skilled jobs and in our local communities,’ Woodburn said.

The Farnborough-based company employs more than 93,000 people. Last month BAE said it had penned an £870million contract to fit cutting-edge radar to some of the RAF’s fleet of Typhoon jets.

The ECRS Mk2 programme, in collaboration with Leonardo UK, will sustain 600 jobs at the defence contractor’s sites in Edinburgh, Luton and Lancashire.

And BAE said the weapons base in Ukraine was ‘progressing’ and that conversations were being had about opening an office in the country.

Andy Chambers, industrials analyst at the Edison Group, called the results ‘very strong’ and said the BAE was ‘benefiting from a general rearmament among Nato countries as the war in Ukraine grinds on’.

Shares in BAE Systems were up 6.36 per cent, or 59.4p, to 992.8p, having risen over 23 per cent in the last year.