BAE Systems on track for 2021 targets after a solid start: CityAM
Defense giant BAE Systems said this morning it was on track to meet sales and profit guidance for 2021.
The company, a major supplier to the Department of Defense (MoD) and other governments around the world, has said it is well positioned for growth in the coming years due to plans to increase defense spending in the world.
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BAE expects sales growth of 5% to 7% and underlying operating profit growth of over 10%.
But the company’s shares slipped 0.9% after today’s opening.
After last year’s disruptions, BAE said the performance of its ship repair business in the United States has improved and it has ramped up production of combat vehicles.
Likewise, its applied intelligence division had a good start to the year, he said, after a restructuring program.
Its air, maritime, electronics, and intelligence and security systems divisions all continue to perform well, BAE added.
Chief Executive Charles Woodburn, who was recently the subject of a shareholder revolt over a bonus deal designed to keep him in the company, said:
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“Our good operating performance underscores our confidence in the annual forecast for revenue growth and margin expansion and our three-year cash flow targets.
“From a strategic perspective, our geographically diversified portfolio is aligned with growing defense budget sectors; We are increasing our investments in self-funded research and development aligned with customer-centric areas and leveraging our advanced capabilities in changing markets to ensure that we are increasingly better positioned to meet the needs of all our stakeholders. “
Lee Wild, Head of Equity Strategy at Interactive Investor, said: “A little over five months into the new fiscal year and BAE Systems is still on track to meet its revenue, margin and profit targets. Treasury.
“BAE’s order book size is reassuring and new orders, led by £ 848 million underwater Dreadnought financing, have exceeded expectations.
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“As always, governments have enough money to spend their vast military budgets, and many of BAE’s biggest customers plan to put even more money into defense.”
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “Management also noted that President Biden’s proposed defense budget for 2022, which roughly matches current year’s spending, should support the ambitions of group revenue growth. We are inclined to agree.
“About half of BAE’s total revenue comes from the United States, so the new president’s pledge to maintain defense spending offers a sigh of relief.”