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Gloucestershire Business News

War in Ukraine boosts earnings forecast for Gloucester-based firm

Arms and aerospace manufacturer BAE Systems has revealed an increase in orders as global spending on defence rises as a result of the war in Ukraine.

The company, which has a base at Gloucester Business Park in Brockworth, has taken £28bn in orders this year according to its recent trading update.

A statement published with the trading update read: "A key underpin for our growth aspirations is the benefit we derive from our geographic diversity.

"Many of the countries in which we operate have either announced increases or are making plans to increase spending to address the elevated threat environment."

BAE Systems said it had received £18bn worth of orders in the first half of the year, with a further £10bn in the second.

The UK had help boost the order book, with PM Rishi Sunak awarding the company a £4.2bn contract in Tuesday to build five new Royal Navy ships.

Most major defence programmes tend to be long cycle in the build and subsequent support phases," the statement added.

"As a result, contracts secured now will be executed and traded for many years to come, providing us with long-term growth visibility."

Chief executive Charles Woodburn added: "We see sales growth coming from all sectors and opportunities to further enhance the medium-term outlook as our customers address the elevated threat environment."

Company earnings before interest are expected to be four to six per cent higher this year than last, of between £2.29bn and £2.33bn.

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