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BAE Systems PLC on Thursday reported good trading in the first half of 2022 in line with expectations despite interim profit being weighed down by its ship repair business.
The London-based aerospace company also confirmed the appointment of Cressida Hogg as its new chair.
Hogg will join the board of the defence contractor on November 1 and replace Roger Carr at the annual general meeting in May next year. Hogg is currently chair of London-based property developer Land Securities Group PLC.
LandSec said it has started a process to find a new chair, noting Hogg will have served on the board for nearly nine years.
‘On behalf of the board I would like to thank Cressida for her invaluable contribution and leadership during her time with Landsec. The business has benefited considerably from her broad business experience and, from a personal perspective, I have been grateful for her support and guidance since being appointed CEO a little over two years ago,’ said LandSec CEO Mark Allan.
For the six months to June 30, the BAE Systems said pretax profit fell 32% to £779 million from £1.15 billion a year before, despite revenue rising 4.3% to £9.74 billion from £9.34 billion.
BAE says its US Ship Repair profitability was significantly impacted by the Covid-19 pandemic, but that it continues to recover.
More positively, order intake stood at £17.99 billion, representing an increase of 70% from £10.58 billion a year earlier. This has resulted in a ‘record defence order backlog’, amounting to £52.7 billion as at June 30, compared to £44.0 billion at December 31.
‘We expect continued strong order flow in the second half of the year, with opportunities across all sectors to enhance the growth outlook,’ the group noted.
BAE Systems saw sales in the first half increase 2.8% on a constant currency basis to £10.60 billion from £10.0 billion a year ago. Underlying earnings before interest and tax also rose 4.4% to £1.11 billion from £1.03 million,
‘Trading in the first half has been in line with expectations delivering strong order intake and good operational performance,’ said BAE Chief Executive Charles Woodburn.
Looking ahead, BAE has kept full-year guidance unchanged. It said governments are prioritising defence and security in the current political climate, providing a strong demand for the company's capabilities. BAE said it is well- positioned to ‘grow sales profitably and increase cash conversion in the coming years.’
BAE declared a 10.4 pence per share interim dividend, up 5.0% from 9.9p a year before. ‘Good operational performance, execution on our strategy and confidence in the outlook enables us today to announce a 5% increase in the interim dividend,’ added Woodburn.
Shares in BAE Systems were down 2.4% at 763.83 pence each on Thursday morning in London. LandSec's shares were up 0.3% at 721.60p.
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