BAE Systems told shareholders it is on track for another strong year with weapons demand buoyed by the war in Ukraine and rising tensions with China.
In his latest annual meeting before standing down, chairman Roger Carr told shareholders guidance for 2023 remains unchanged with sales forecast to grow by 3-5%, underlying profits (EBIT) by 4-6% and free cash flow to exceed £1.2bn.
Management also stated that order intake is likely to exceed sales this year, while long-term contracts such as Aukus, Tempest and F-35 will support growth into the future.
Moreover, BAE said Western governments are now prioritising defence spending in response to the growing threats, while Finland joining NATO and defence expenditure rising in places such as Japan also benefitting the company.
Shore Cap adds that the update underlined that BAE is a high-quality business with multi-year earnings visibility and primed to benefit from growing global defence budgets.
Shares eased 1% to 1,009p.