Defence giant's investment drive

By Ged Henderson

07 May 2025

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BAE Systems is planning more large-scale investment and recruitment as it prepares for a continued increase in global defence spending.

The defence giant, which employs 11,000 workers in Lancashire, will recruit more than 2,400 apprentice, undergraduate and graduate roles in the UK this year.

And it aims to build on its more than £1bn of capital expenditure in 2024, to further increase capacity and develop and modernise its systems.

The plans were announced in a market update before its annual general meeting today. It said trading so far this year was in line with management’s expectations and it was well positioned to capture additional defence spending.

In its update the company said: “In 2024 we invested a record amount in research and development (R&D) and capital expenditure, and we continue to invest to support future growth.”

It added: “We are building on more than £1.0bn of capital expenditure in 2024, as we increase capacity for the future as well as develop and modernise our systems.”

The business also looked to ease any concerns over US tariffs. It said: “The vast majority of equipment we deliver to our US customers is produced in our US operations with a largely domestic supply chain.

“As such, we do not expect to be materially impacted by the US tariffs, as they are currently proposed.”

It also reported that it was “actively engaged” with the UK government on its ongoing strategic defence review and defence industrial strategy, which will make recommendations on future defence plan in the coming months.

Its update said: “The regions in which we operate are poised for higher defence spending. We expect this to provide a robust set of further opportunities across all our sectors.

“We have a strong, established position in Europe and our range of products and services aligns well to the capability requirements of these nations. These include combat aircraft, combat vehicles, air defence, missile systems, artillery, munitions, drones, electronic warfare and sensor technology.

“Our key markets in Asia-Pacific and the Middle East are also expected to see higher defence spending, and we will continue to support our government customers in these regions with leading products and services.”

Its investment in self-funded R&D is focused on key technology areas including electronic warfare, autonomy, laser-guided weapons, uncrewed air systems, synthetic training, electrification applications and space solutions.

Charles Woodburn, BAE Systems chief executive, said: “We’ve had a strong start to 2025 and are maintaining our guidance for the full year.

“During this time where the defence and security landscape is rapidly evolving, we are focused on delivering our long-term programme commitments to our customers, while investing in our business to boost capacity, drive efficiencies and shape our portfolio to support future growth.”

The business has guided full-year revenue growth of between seven and nine per cent on last year’s turnover of £28.3bn.

Its 2024 final dividend of 20.6 pence per share will be paid, subject to shareholder approval, on June 2.

And it will announce its results for the six months ending June 30, 2025 on July 30, 2025.

BAE Systems operates two Lancashire plane-making plants in Warton and Samlesbury.

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