LONDON --- Britain’s BAE Systems forecast another year of growth in 2020, saying the company was well-placed to take advantage of increased defence spending that could help to offset any future impact from a German ban on arms exports to Saudi Arabia.
Full-year results announced on Thursday at the upper end of forecasts, helped to drive shares 3.5% higher at 664.6 pence by 0954 GMT.
The maker of Typhoon fighters, combat vehicles and Astute Class nuclear-powered attack submarines, has been affected by a German ban announced in 2019 on exporting arms to Saudi Arabia.
The export ban has put a question mark over a multi-billion pound deal to sell 48 Eurofighter Typhoon jets to Riyadh, built by a BAE-led consortium that also includes MTU Aero Engines and Airbus. (end of excerpt)
Click here for the full story, on the Reuters website.
Click here for the full BAE earnings statement, on the BAE Systems website.
(Source: BAE Systems; issued Feb. 20, 2020)
Charles Woodburn, Chief Executive, said: “2019 has been a year of significant progress for BAE Systems. We delivered a good set of financial results in line with guidance, growing sales and earnings, with improved operational performance and increased investment in the business to underpin our growth outlook.
“Strategically we took a number of actions to strengthen the portfolio and the pensions agreement announced today is good for all stakeholders. These will help to accelerate our strategy and further our growth outlook.
“We have a large order backlog and remain focused on strong programme performance to deliver a sustainable business model with enhanced financial performance.”
Operational and strategic key points (Selected excerpts)
-- Qatar Typhoon and Hawk aircraft programme met its contractual milestones in the year. Contract amendment agreed to accelerate Typhoon deliveries
-- F-35 programme Lots 12 to 14 price negotiations concluded. 142 rear fuselage assemblies delivered in the year in line with ramp-up to full rate production in 2020
-- Tempest technology maturation programme contracted between industry and UK government. Italy and Sweden governments committed to working with UK to develop next-generation combat air capability
-- The first four Hawk aircraft assembled in Saudi Arabia were accepted and entered service in-Kingdom
-- UK Tornado fleet successfully retired from service on schedule following RAF declaration that Typhoon had met Centurion standard with embodiment across the Typhoon fleet
-- The design and production readiness phase of the Hunter Class programme for the Royal Australian Navy continues to make good progress
-- HMS Prince of Wales vessel acceptance achieved in December
-- Four River Class Offshore Patrol Vessels have now been accepted, with the programme on target for completion in 2020
-- Construction commenced on second of the three contracted Type 26 frigates in August
-- Construction of the first Dreadnought Class submarine continues to advance, with £1.4bn of funding received in the year
-- Sea trials for the fourth Astute Class submarine are due to take place in 2020
-- A £230m seven-year Torpedo Repair and Maintenance contract was awarded
-- The UK combat vehicles joint venture between Rheinmetall and BAE Systems Land UK was launched on 1 July
-- Design requirements for the Canadian Surface Combatant are progressing towards finalisation with partners and the Royal Canadian Navy
-- Growing demand for Advanced Precision Kill Weapon System (APKWS) laser-guided rockets, with production awards totalling over $400m (£302m) received in the year
-- Over 500 electronic warfare systems delivered for the F-35 Lightning II programme, and awarded production and Block 4 modernisation contracts worth more than $750m (£566m)
-- Acquired Riptide Autonomous Solutions to advance capabilities in maritime mission requirements
-- Continuing growth in space resilience domain
-- Establishing new facilities in Huntsville, Alabama and Manchester, New Hampshire to meet the record order backlog
-- Active inceptors certified for Gulfstream G500 and G600 jets and in production
-- Battery electric and fuel cell electric transit systems recorded five million zero emission miles
Platforms & Services (US)
-- Deliveries of the M109A7 self-propelled howitzer and ammunition carrier vehicle sets are progressing and the decision to proceed to full-rate production was made in Q1 2020
-- First deliveries achieved of the Amphibious Combat Vehicle to the US Marine Corps
-- Contract modification award of $575m (£434m) received for LRIP vehicles on the Armored Multi-Purpose Vehicle programme
-- Work underway to upgrade 332 vehicles to the Bradley A4 configuration
-- Awarded contracts worth $466m (£352m) to upgrade configuration on various M88 vehicles
-- First tandem docking of two large warships in San Diego dry-dock for contracts worth more than $170m (£128m)
-- Deliveries continue of the M777 ultra-lightweight howitzer to the Indian Army, with subsequent systems to be assembled at the Mahindra Defence Systems facility
For the year ending 31 December 2020, the Group’s underlying earnings per share is expected to grow by mid-single digit percentage compared to the full-year underlying earnings per share in 2019 of 45.8p, assuming a $1.30 to sterling exchange rate.
Click here for the full earnings statement, on the BAE Systems website.