BAE cite Glasgow shipbuilding as profits rise

The defence giant has cited its Glasgow shipbuilding programme and other large scale projects as reasons for increased sales and profits.

According to Hargreaves Lansdown, full year sales, excluding the impact of exchange rate movements, rose 4% to £20.9bn. Underlying EBITA – which measures operating profit excluding interest, tax and amortisation payments, rose 1% £2.1bn.

For the new financial year, BAE expects sales growth of 5% – 7%, and underlying profits are expected to rise over 10%.

Charles Woodburn, Chief Executive, 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.”

The following is from BAE and lists their ‘Operational and strategic key points’.

• Contract secured to support the production of 38 Typhoon aircraft for the German Air Force
• Qatar Typhoon and Hawk aircraft programme met its contractual milestones in the year
• F-35 programme Lots 12 to 14 contract definitised following price agreement. 126 rear fuselage assemblies completed in the year, below the contracted level as a result of COVID-19 disruption. Ramp up to full-rate production in 2021
• Governments of Italy and Sweden committed to working with the UK to develop next-generation combat air capability
• A further six Hawk aircraft assembled in Saudi Arabia were accepted and entered service in Kingdom
• The design and production readiness phase of the Hunter Class Frigate programme for the Royal Australian Navy continues to make good progress
• Sale of Advanced Electronics Company to Saudi Arabian Military Industries completed in February 2021

• The fourth Astute Class submarine, HMS Audacious, left our Barrow site in April to begin sea trials with the Royal Navy
• Construction of the first two Dreadnought Class submarines continues to advance
• The build phase of the River Class Offshore Patrol Vessel programme is now complete, with the fourth ship, HMS Tamar, handed over to the Royal Navy in March, and HMS Spey, the fifth and final ship, handed over in October
• Construction of the first two City Class Type 26 frigates for the Royal Navy continues to progress
• Acquisition of Techmodal, a UK data consultancy and digital services business, completed in August
• Announcement of a 15-year agreement with the UK Ministry of Defence to supply the Next Generation Munitions Solution between 2023 and 2037
• RBSL has secured its share of the Mechanised Infantry Vehicle Boxer programme

• Airborne Tactical Radios and Military Global Positioning System acquisitions completed, performing well and integrations are progressing
• F-35 electronic warfare systems for Lot 12 completed, surpassing cumulative programme deliveries of 800 electronic warfare systems as of year end
• Successful demonstration of APKWS® ground-launch capability
• Terminal High Altitude Area Defense (THAAD) seeker executing at full-rate production, and receipt of additional order to design and manufacture next-generation infrared seekers
• Continued classified work
• Demand in the commercial business lines of Controls & Avionics Solutions and Power & Propulsion Solutions has been negatively impacted by COVID-19

• Delivery of the first production Armored Multi-Purpose Vehicles took place in the second half; one of each of the five variants delivered by year end
• Amphibious Combat Vehicle programme moved to full-rate production phase after Initial Operational Capability declared
• Delivery of more than 50 production Bradley A4 vehicles
• New US Navy contract modifications totalling $114m (£83m) for Mk45 Mod 4 upgrades
• Initial deliveries of Virginia Payload Module tubes completed
• Ship Repair secured more than $1bn (£0.7bn) in US Navy maintenance and modernisation orders
• Ordnance Systems received $233m (£170m) in modernisation contracts
• Contracted to provide five 57Mk3 and ten 40Mk4 naval gun systems for the UK Royal Navy’s Type 31 frigates
• Operational delays and disruptions related to the COVID-19 pandemic were experienced across manufacturing and shipyard facilities

Intelligence & Security

• US-based Intelligence & Security business continues to maintain its bid pipeline, perform on existing contracts and win new orders. All three businesses delivered a book to bill ratio of over one.
• Awarded a seven-year, $495m (£362m) contract on Instrumentation Range Support Programme
• Multi-year Indefinite Delivery, Indefinite Quantity contract received to provide electronic hardware and engineering services for a US government customer
• Our Federated Secure Cloud technology approach and processes are being employed to maintain and secure US Army Cyber Command’s virtual desktop infrastructure

Applied Intelligence

• Strong order intake, revenue and profitability performance in the core underlying business driven by the Government business unit
• Significant profit growth year-on-year due to cycling the restructuring of the Technology & Commercial business in 2019
• Sale of the US-based software-as-a-service business completed in November