BAE earnings sky-high

BAE Systems' underlying earnings for the first six months have increased by 19 per cent to £979m, underpinning expectations for good growth for the full-year.

Sales increased by 28 per cent to £9,941m from £7,751m and like-for-like sales were up by six per cent. The group’s cash inflow from operating activities was at £448m and dividend rose 10.3 per cent to 6.4p per share.

However, the group’s upbeat results were overshadowed by its pension deficit, which rose by 36 per cent to £4,503m. Its assets reduced from £7,289m to £5,040m, largely as a result of the increased deficit and changes in reserves for the foreign exchange rate.

Earlier this month, the company’s BVT Surface Fleet secured a £3.5bn agreement with the Ministry of Defence (MoD) boosting it’s medium-term outlook. Overall, the group forecast results for the second half of the year to be strong as a result of increased deliveries of Typhoon and an order book visibility of £45bn.