finance

BAE Systems announces 'strong' results as sales soar to almost £21bn



Defence, aerospace and security company BAE Systems has announced a “strong” set of results, with sales increasing by 4% to almost £21bn – despite the “challenging” pandemic.

The preliminary full year results for 2020 include earnings before tax rising to £2.13bn and operating profit increasing by £31m to £1.93bn.

The statement said the group is now hoping for “another year of top line growth” and expects sales to increase by 3% to 5%.

Despite the positives, BAE Systems also reported that net debt increased to £2.71bn, while its order book of £36.3bn was down from 2019’s £37.2bn.

The company has a strong presence in Scotland, with more than 3,000 people located across the naval ships business in Glasgow, maritime services and defence information facilities at Hillend, regional aircraft operations in Prestwick and RAF Lossiemouth, where support and training is provided for the RAF Typhoon fleet.

During the year, all five River Class Offshore Patrol Vessels have now been accepted by the Ministry of Defence, with the final ship – HMS Spey – leaving Glasgow and arriving in Portsmouth Naval Base in October.

The first three City Class Type 26 frigates are on contract with construction underway on the first two ships.

The programme continues to see “strong progress” with all units of the first of class, HMS Glasgow, and approximately one-third of the units of the second vessel, HMS Cardiff, in construction.

In the second half of 2020, a further five contracts were placed with UK suppliers to Type 26 worth more than £100m, supporting 250 jobs.

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The programme sustains more than 4,000 jobs in total across the UK.

The team in Hillend near Edinburgh worked with colleagues in Portsmouth, Guildford and Lancashire to design, produce and start medical approval of a brand new ventilator in three weeks – a process that usually takes years.

While the ventilators were ultimately not required, the report described it as a “profound experience for our people to do their part”.

BAE Systems has also promised to recruit 100 apprentices and graduates at sites in Scotland during 2021, as part of the company’s largest intake of apprentices and graduates across the UK in a single year.

Charles Woodburn, chief executive at BAE Systems, said: “Throughout 2020, we focused on keeping our people safe and supporting our communities, whilst continuing to deliver for our customers.

“In 2021, we will continue to drive operational performance, progress our sustainability agenda and invest in high-end discriminating technologies to meet our customers’ priorities, which will ensure we are well positioned to grow the business and contribute to the economic prosperity of the countries in which we operate.”

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