Earnings take off at BAE Systems

Defence giant BAE Systems revealed an annual sales rise of £1.1bn today as it announced its 2016 full year results.

P3EThe major Lancashire employer posted sales of £19bn and underlying earnings per share of 40.3p as it also revealed it had seen an improved outlook for defence budgets.

BAE Systems, which has plane-making plants at Warton and Samlesbury has also named its next chief executive after confirming Ian King will step down this year after nine years in the hot-seat.

Charles Woodburn, currently chief operating officer at the Eurofighter Typhoon manufacturer, will take over the role in July after King’s retirement.

Commenting on today’s results, outgoing chief executive Ian King 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.”

BAE Systems said its 2016 highlights included the announcement by the UK and French Governments in March, of a €2bn (£1.7bn) programme to build operationally representative unmanned combat air system demonstrators following a successful joint feasibility study.

Orders totalling £1bn have been received via Eurofighter from BAE Systems' Italian Eurofighter partner, Leonardo, for its share of work on the 28 Typhoon aircraft for Kuwait.

A ten-year partnership arrangement with the UK Ministry of Defence (MOD) to support the UK Typhoon fleet, expected to be worth at least £2.1bn, was signed in July.

And in November, a team including BAE Systems, was chosen to be a provider of maintenance repair, overhaul and upgrade of F-35 Lightning II avionics and components, during the period 2021 to 2025 on a global basis and from 2025 onwards for the European region.

Chris Boardman, Managing Director at BAE Systems Military Air and Information, said: “We made good progress in 2016 thanks to the dedication of our highly skilled workforce.

“We achieved key targets on Typhoon and F-35 Lightning II production, long-term support arrangements on Typhoon, F-35 Lightning II and Hawk and an agreement between the UK and French Governments to progress the new unmanned combat air systems demonstrator programme.

“The recent heads of agreement signed with Turkish Aerospace Industries, ahead of a planned contract to collaborate on the first design and development phase of an indigenous fifth-generation fighter jet, further helps to support critical skills, technology and technical expertise to the benefit of our business and the wider economy.” The company also announced that its dividend per share for 2016 was 21.3p, up from 20.9p in 2015.