Britain's biggest defence firm said the war in Ukraine is accelerating demand for its kit.

BAE Systems, which has an office in Gloucester, reported better than expected half-year profits of £1.1 billion, up eight per cent on a year ago, as reported by This is Money.

BAE shares have risen by more than 30 per cent since Russia invaded Ukraine in February, as countries ramp up their defence budgets - boosting the sales outlook for the maker of fighter jets, combat ships and submarines.

BAE's order backlog has risen to £52.7 billion. But it has admitted to challenges with hiring and supply chains.

The company said the conflict in Ukraine will have a longer-term impact in terms of driving defence spending and making defence and security higher priorities for Government.

The equipment currently going into Ukraine is coming out of the existing stock of the countries which are supporting Ukraine. BAE benefits because the countries donating their equipment need to replace it.

Boris Johnson has pledged an increase in the defence budget to 2.5 per cent, while leadership frontrunner Liz Truss wants to raise it to three per cent.

About a quarter of BAE's revenues come from the UK and nearly half from the US, with the remainder coming from other markets, including Australia and Saudi Arabia.