Defence giant BAE Systems targets growth after a 'strong' year of sales

Defence giant BAE Systems is expecting another year of growth after a "strong" year of sales despite the coronavirus pandemic.
BAE Systems' prototype of Tempest, the next generation of fighter jet, with the Typhoon in the backgroundBAE Systems' prototype of Tempest, the next generation of fighter jet, with the Typhoon in the background
BAE Systems' prototype of Tempest, the next generation of fighter jet, with the Typhoon in the background

It told investors that sales rose to £20.86 billion in 2020, up from £20.11 billion in the previous full year.

It also has an order backlog of £45bn.

Among the highlights in the Air division, it has secured a contract secured to support the production of 38 Typhoon aircraft for the German Air Force

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The company broadly shrugged off the impact of the pandemic, although some products it sells to commercial sectors such as aviation, cyber and transport saw a fall in demand.

However, it said this this was largely offset by positive trading in its electronic systems, fighter jet and combat shipbuilding units.

BAE added that it expects two acquisitions in its electronic systems business from last year to help boost its performance in the current year.

The company added: "With a strong year behind us against a challenging backdrop of the global pandemic, we look forward to another year of top line growth, with a year of margin expansion and good cash flow, all reflected in our Group guidance."

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Charles Woodburn, chief executive of the company, said: “Thanks to the outstanding efforts of our employees and close cooperation with our customers, suppliers and trades unions, we have delivered a strong set of results against a challenging backdrop of the global pandemic.

“Throughout 2020 we focused on keeping our people safe and supporting our communities, whilst continuing to deliver for our customers.

“In 2021 we will continue to drive operational performance, progress our sustainability agenda and invest in high-end discriminating technologies to meet our customers’ priorities, which will ensure we are well positioned to grow the business and contribute to the economic prosperity of the countries in which we operate.”

BAE Systems employs around 10,000 people in Lancashire at its sites at Warton and Samlesbury.

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It makes the Eurofighter Typhoon, Hawk and parts of the Lockheed Martin F-35.

Shares in the company nudged higher in early trading todfay after it delivered earnings per share ahead of market expectations.

BAE said it delivered a two per cent increase in earnings per share for the past year, with this expected to rise to between three per cent and five per cent in 2021.