BAE Systems PLC (LSE:BA.) raised guidance after a strong first half, as a record order book reflecting the war in Ukraine underpinned confidence.
The UK defence manufacturer said revenue in the six months ended 30 June 2023 jumped 13% to £11.00 billion from £9.74 billion the year prior while operating profit leapt 19% to £1.23 billion from £1.03 billion. EPS soared 62% to EPS 31.8p from 19.6p.
Overall operational performance was good across all sectors with a significant amount of BAE Systems equipment provided by UK government customers to Ukraine as the war against Russia continues.
Order intake of £21.1 billion resulted in a record order backlog of £66.2 billion.
Chief executive Charles Woodburn said: “With a record order backlog and good operational performance, we're well positioned to continue delivering sustained growth in the coming years.”
This confidence saw the FTSE 100-listed firm raise guidance for sales, EBIT and EPS.
Sales guidance was increased by 200 basis points (bps) to 5% to 7%, reflecting the accelerated spend profile on the Dreadnought programme and good demand and operational performance across all sectors.
Underlying EBIT guidance was lifted by 200 bps to 6% to 8% and underlying EPS guidance by 500 bps to 10% to 12%, reflecting higher profit, higher interest income and a reduction in the expected tax rate to 19%.
Expectations for free cash flow were boosted by £600 million to more than £1.8 billion.
To cap the good news, shareholders were rewarded with an 11% hike to the dividend to 11.5p while a further £1.5 billion buyback programme has been approved which is expected to roll on after the current programme is completed.