BAE Systems sees ‘positive momentum’ from UK defense spending

BAE Systems has said a UK government commitment to defense spending by 2030 and the recent US military aid deal for Ukraine should give the defense giant “further positive momentum”.

It came as the boss of the London-listed arms company said it has delivered a “strong” operational performance and is on track to meet its targets for this year.

BAE said its forecasts remain unchanged and is therefore on track to deliver sales growth of between 10% and 12% this year.

The company also says it forecasts underlying earnings growth of between 11% and 13% this year.

The group said it is currently witnessing “high” defense spending across its sectors and key markets.

“The recent passage of the US additional aid package to Ukraine and the UK government’s commitment to spend 2.5% of GDP by 2030 should provide further positive momentum,” it added.

Last month, Prime Minister Rishi Sunak pledged an extra £75 billion in defense spending over the next six years as part of his government’s commitment.

On Thursday, BAE highlighted a number of key contracts, including a $754 million production deal for armored multi-purpose vehicles.

It also highlighted that it is currently integrating the Ball Aerospace business which it acquired earlier this year for around £4.4 billion.

The company, which has been renamed Space & Mission Systems, has made a “good start” to the year.

Charles Woodburn, CEO of BAE Systems, said: “Trading so far this year has been in line with expectations.

“Operational performance remains strong and our backlog and existing programs underscore our confidence in our long-term value-creating model.

“Our global presence and diverse portfolio of products and services ensure high visibility of revenue growth, margin expansion and cash generation in the coming years.”