BAE Systems post revenue over £10bn with Saudi deals a tenth of this as new chair brought in

BAE Systems reported higher sales and revenue for the first half of 2021 helped by work with Saudi Arabia as it met market expectations and announced a new Chair from next year.

The defence company’s sales were up 2.8 per cent from the previous year’s first half to £10.6bn as its revenue climbed 4.3 per cent to £9.7bn in H1 2022.

BAE Systems also announced that Cressida Hogg, who will join the Board as a non-executive director, will take over as Chair in March 2023, succeeding current Chair, Sir Roger Carr. Hogg is currently Chairman of the Board of Land Securities Group.

“I very much look forward to working with (CEO) Charles and the other Board members through the next phase of the Company’s development,” Hogg said. “BAE Systems plays a key role in defence and security both in the UK and internationally.”

The company works closely with Saudi Arabia to fulfil its contractual obligations with them, including under the Saudi British Defence Co-operation Programme (SBDCP) agreement which has been renewed for an additional five years.

About a tenth of BAE’s sales and revenue were from its dealing with Saudi Arabia, netting the company more than £1bn. The majority of its sales and revenue came from its work with the US, at over £4.6bn, and over £2.6bn with the UK.

BAE delivered on its warfare and defence systems, maintaining production and taking on new contracts for intelligence and security. It was granted a new nuclear submarine contract, and an 18-year contract to continue supporting U.S intercontinental ballistic missiles (ICBMs).

The company mentioned Ukraine as an operational and strategic key point and said it “closely engaged” with global customers to provide on-going support wherever requested, while delivering on “programme specific mission critical requirements of our customers.”

The company’s performance for the year led to directors announcing an interim dividend of 10.4p per share, payable on 30 November 2022. A new share buyback programme of up to £1.5bn over the next three years will also begin.

CEO Charles Woodburn said, “Our diverse portfolio, together with our focus on programme execution, cash generation and efficiencies are helping us navigate the current macroeconomic challenges and position us well for sustained top line and margin growth in the coming years.”