BAE Systems begins 2017 with 'good momentum'
BAE Systems
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16:35 18/04/24
BAE Systems confirmed the 2017 has started with "good momentum" as the defence and aerospace contractor cited an improving outlook for defence budgets in a number of its markets.
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In a statement ahead of the FTSE 100 group's annual shareholder meeting, chief executive Ian King said trading for the period has remained consistent with expectations at the time of February's results announcement.
The outlook remains unchanged, with 2017 underlying earnings per share expected to be approximately 5% to 10% higher than the 40.3p delivered last year.
"We have started the year with good momentum building on a strong operational performance in 2016 and the business is performing well," King said, adding that with an improving outlook for defence budgets in a number of our markets in 2017 and beyond, "we are well placed to continue to generate attractive returns for shareholders".
King, who will retire and be replaced by Charles Woodburn with effect from 1 July, noted the recent agreement of the US budget, which it said underpinned the medium term planning assumptions for its US businesses.
Its new San Diego dry dock accepted its first docking in the first quarter and the US ship repair business received orders of $352m (£284m) in the quarter, while early in April BAE was awarded a $112m (£87m) contract by the US Army to perform technical support and sustainment of M88 recovery vehicles.
UK defence requirements were said to have remained consistent with the commitments made as part of the 2015 Strategic Defence and Security Review, with the most notable contract in the period being a £1.4bn Royal Navy contract for the sixth Astute Class submarine.
BAE said it expected judgment in the near future from the judicial review into the process followed by the UK government in granting defence export licences to the Kingdom of Saudi Arabia.
Other key deals secured by BAE this year include January's £419m contract to provide 145 M777 ultra-lightweight howitzers to India, a heads of agreement was signed with Turkish Aerospace Industries to collaborate on the design and development phase of a next-generation fighter for the Turkish Air Force.
In February, the company acquired US-based IAP Research to enhance its position in advanced weapon systems, such as the electromagnetic railgun.
The MBDA missile joint venture, in which BAE has a 37.5% interest, has continued to win new orders and the company's share of which was valued at approximately £143m in the first quarter.