BAE Systems is gearing up for a boost from the UK's defence spending pledge, with the firm anticipating "further positive momentum" following the Government's commitment to increase defence expenditure by 2030 and the recent US military aid package for Ukraine.
The London-listed defence giant has reported a "strong" operational performance and is on course to hit its annual targets. With forecasts holding steady, BAE is eyeing a sales surge of 10% to 12% this year, alongside an expected underlying earnings jump of 11% to 13%.
The company is riding a wave of "high" defence spending across its markets and sectors. "The recent passing of the US supplemental aid package to Ukraine and the commitment by the UK Government to spend 2.5% of GDP by 2030 should build further positive momentum," BAE stated.
Last month saw PM Rishi Sunak vowing an additional £75billion in defence outlay over the coming six years, aligning with his administration's goals. On Thursday, BAE spotlighted several significant contract wins, including a $754 million (£604million) agreement for armoured multi-purpose vehicles.
Moreover, BAE is busy integrating the recently acquired Ball Aerospace enterprise, now rebranded as Space & Mission Systems, which it snapped up earlier this year for £4.4billion, and has already made a "good start" to the year. Charles Woodburn, the chief executive of BAE Systems, stated: "Trading so far this year has been in line with expectations."
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"Operational performance continues to be strong and our backlog and programme incumbencies underscore our confidence in our long-term value-creating model. Our global presence and diverse portfolio of products and services provide high visibility for top-line growth, margin expansion and cash generation in the coming years."
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