BAE Systems releases full year results

BAE Systems said that it had made a pretax profit of £1.15bn in 2016, up from £1.09bn in 2015.

In the UK, the bulk of their profits were generated by ‘a £472m extension to the Type 26 frigate demonstration phase contract, £287m contract for two additional Offshore Patrol Vessels, including support services for the five-ship programme, and £1.3bn of funding for the Dreadnought Class submarine programme, including design, initial manufacture, materials and facilities investment’

In addition, work undertaken on Typhoon which the company describe as ‘partnership arrangement for support to the UK fleet expected to be worth at least £2.1bn over a ten-year period and £1.0bn of orders for BAE Systems’ workshare on 28 aircraft for Kuwait’ accounted for a significant bulk of BAE activity in the UK.

According to a press release, the financial highlights were:

• Sales increased by £1.1bn to £19.0bn, almost all of which was due to exchange translation.
• Underlying EBITA increased to £1,905m, or 7% on a constant currency basis.
• Underlying earnings per share of 40.3p, 7% higher than adjusted 2015 underlying earnings per share of 37.8p⁵, in line with guidance.
• Operating business cash flow increased by £323m to £1,004m.
• Net debt of £1.5bn.
• Order intake³ increased by £7.5bn to £22.4bn.
• Order backlog³ increased by £5.2bn to £42.0bn.

Ian King, chief executive of BAE Systems, said:

“2016 was a good year for BAE Systems. Our strategy is well defined; we have a large order backlog, long-term programme positions, strong programme execution and a well-balanced portfolio.

With an improved outlook for defence budgets in a number of our markets, we are well placed to continue to generate attractive returns for shareholders.”