BAE Systems boosted by higher defence spending – Daily Business

BAE Systems has reported record orders on the back of increased defence spending at home and overseas.

The company secured £36.8 billion of new work for submarines, frigates, combat aircraft, combat vehicles and electronic warfare systems lifting the order backlog to £83.6bn.

Sales grew by 10% to £30.7bn, while underlying EBIT rose by 12% to £3.32bn, generating a return on sales of 10.8%.

The board has recommended a 10% increase in the final dividend to 22.8p, bringing the total for 2025 to 36.3p. The company also returned £1.53 billion to shareholders through dividends and share repurchases.

Over the period the global workforce increased by 4,000, including more than 2,500 early careers employees.

During the year it opened the Janet Harvey Hall at the Govan site in Glasgow, providing capacity for two Type 26 frigates to be constructed side-by-side, with HMS Belfast and HMS Birmingham currently under construction in the hall.

The Princess Royal officially opened the Applied Shipbuilding Academy in Glasgow. The £12m facility comprises a multi-purpose flexible learning hub and provides a high quality, hands-on training environment.

The Princess of Wales, or Duchess of Rothesay as she is titled in Scotland, officially named HMS Glasgow, the first of eight Type 26 frigates the company is building for the Royal Navy.

Norway selected the frigate for its future warship procurement programme. The £10bn Government-to-Government agreement paves the way for the UK’s largest ever warship export deal by value.

The UK Government announced an agreement with Türkiye to acquire 20 Typhoon aircraft and the company delivered the final two Typhoon aircraft to Qatar during the year, bringing the Qatari Emiri Air Force fleet total to 24.

Charles Woodburn, chief executive, said: “Our results highlight another year of strong operational and financial performance, thanks to the outstanding dedication of our employees.

“In a new era of defence spending, driven by escalating security challenges, we’re well positioned to provide both the advanced conventional systems and disruptive technologies needed to protect the nations we serve now and into the future.

“With a record order backlog and continuing investment in our business to enhance agility, efficiency and capacity, we’re confident in our ability to keep delivering growth over the coming years.”

The company also announced that Angus Cockburn will succeed Stephen Pearce as chair of the audit and risk committee. Mr Cockburn has been a member of the committee since joining the board in November 2023.

Mr Pearce has informed the board of his intention to retire as a non-executive director at the end of November.

Mr Cockburn is the chairman of whisky distiller Edrington and served as the CFO of Serco Group and Aggreko. He holds positions as chair of James Fisher & Sons and senior independent director of Ashtead Group.