BAE Systems Growth Soars as Global Defence Spending Rises

Britain’s largest defence contractor BAE Systems has reported extraordinary financial results, driven by escalating global conflicts and mounting geopolitical tensions. The FTSE 100 company’s underlying operating profits surged by more than £300 million last year, with plans to replicate this success in 2025, backed by a record-breaking £77.8 billion order book.

Investor confidence has been bolstered by substantial returns, including £555 million in share buybacks and a 10 per cent dividend increase to 33p per share. The company’s share price has witnessed a remarkable 150 per cent surge since Russia’s invasion of Ukraine three years ago, propelling BAE’s market valuation beyond £40 billion.

The defence giant’s financial performance exceeded analyst expectations, with revenues climbing 14 per cent to £26.3 billion. Underlying operating earnings before interest and tax matched this growth rate, reaching £2.68 billion, while generating £2.5 billion in cash flow. Looking ahead, BAE projects revenue growth between 7 and 9 per cent for the current year, with operating earnings expected to rise by 8-10 per cent.

Chief Executive Charles Woodburn emphasised the company’s readiness to scale up operations in response to increasing defence requirements. The organisation has secured significant contracts, including warship sales to Australia, armoured vehicle provisions in Europe through its Swedish Hagglunds partnership, and fighter jet deliveries to Spain and Italy.

BAE’s strategic positioning across global markets remains robust, with the US operations accounting for nearly half of its £26 billion annual revenues. The UK Ministry of Defence contributes approximately £7 billion yearly, while Saudi Arabia represents 11 per cent of group income. The company’s workforce now exceeds 107,000 following its acquisition of Ball Aerospace, with 2,500 graduates and apprentices recruited in the UK alone last year.