Defence contractor BAE Systems PLC (LON:BA.) warned it would book a charge for the restructuring of its Cyber & Intelligence arm whose revenues have “softened”.
That said, resilient performances of the other component parts of the business mean BAE should hit full-year guidance, which sees earnings per share growing between 5-10%.
READ: UBS cuts stance on BAE Systems to reflect more “tempered outlook“ on the UK defence budget
The update was given as the company unveiled an 11% rise in underlying earnings (EBITDA) to £945mln for the six months ended June. Revenues rose almost 10% to £9.57bn, while the dividend advanced 0.2p a share to 8.8p.
Order book expands
While net debt was a comparatively modest £1.7bn, the company’s pension deficit currently sits at an eye-watering £5.9bn.
The order book, always a good measure of the company’s prospects, swelled by £3.6bn to £10.7bn after it landed contracts for three Type-26 frigates.
It also received the full contract for the Royal Navy’s sixth Astute Class submarine alongside an order for 145 lightweight howitzers from India.
Meets expectations
"BAE Systems' performance in the first half was consistent with our expectations and guidance for the year,” said chief executive Charles Woodburn.
“We have a sound platform for medium-term growth underpinned by a clear and consistent strategy.
“Strong programme execution, technology and enhanced competitive positions will be key in driving the business forward, and we will continue to focus on efficiency and meeting our customers' affordability challenges.”