30th Jul 2025 09:21
(Alliance News) - BAE Systems PLC on Wednesday delivered a "robust" set of results after a strong operational performance in the first half with double-digit percentage sales growth helping push profit higher.
The London-based defence contractor BAE said pretax profit in the six months ended June 30 rose 2.2% to GBP1.19 billion from GBP1.16 billion a year prior.
Underlying earnings before interest and tax jumped 13% to GBP1.55 billion from GBP1.39 billion with underlying basic earnings per share up 12% to 34.7 pence from 31.4p.
BAE said sales rose 11% to GBP14.62 billion from GBP14.00 billion a year ago, or by 9% on an organic basis, with all sectors contributing growth. IFRS revenue, which excludes the impact of equity accounted investments, increased 8.8% to GBP13.57 billion from GBP12.48 billion.
"Our teams have delivered another strong operational and financial performance in the first half of the year, giving us the confidence to upgrade our guidance. In this heightened global threat environment, we continue to deliver mission critical capabilities to armed forces around the world and invest in our people, technologies and facilities to drive the improved efficiency, capacity and agility needed to meet the increasing demand for our highly relevant products and services," Chief Executive Charles Woodburn commented.
BAE now expects an annual sales growth between 8% and 10%, its guidance lifted from a previous 7% to 9% range.
Sales in 2024 amounted to GBP28.34 billion. That figure includes its share of revenue of equity accounted investments. On an IFRS basis, revenue in 2024 totalled GBP26.31 billion.
Underlying earnings before interest and tax growth between 9% and 11% is now forecast, the outlook raised from the 8% to 10% range. Underlying Ebit in 2024 was GBP3.02 billion.
BAE explained that the share price increase since the start of the year is expected to result in fewer shares being repurchased which, along with a marginally higher tax rate, means guidance for EPS growth remains unchanged at between 8% to 10%.
Shares in BAE Systems were down 1.7% to 1,791.00 pence in London on Wednesday morning. They are up 55% in 2025 so far and by 40% in the past 12 months.
Analysts at Berenberg pointed out that while the results were "robust", the raised revenue guidance is 1% below consensus, while implied full-year EPS is in line with consensus, "implying no material consensus moves after today’s results."
Jefferies analyst Chloe Lemarie felt the "limited guide increase could disappoint," after a "good" first half.
BAE said its free cash flow target for 2025 remains at more than GBP1.1 billion.
BAE's order book slipped to GBP57.0 billion at June 30 from GBP60.4 billion a year prior, while the order backlog rose to GBP75.4 billion from GBP77.8 billion.
The firm increased its dividend by 8.9% to 13.5p per share from 12.4p a year ago.
By Jeremy Cutler, Alliance News reporter
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