BAE holds guidance on strong order book

(Sharecast News) - UK weapons maker BAE cautioned that delays to contract funding and payment timings could occur if the US government shutdown persisted but remained confident of growth as countries ramped up defence spending. The company also held annual guidance as trading in the second half was in line with expectations. BAE said it was "encouraged" by a vote in the US Senate to approve a compromise bill to resume funding until the end of January which still needs lower house and presidential approval.

BAE expects operating profit to grow by up to 11% this year on the back of sustained demand, including orders from Turkey for Typhoon aircraft and Norway for Type 26 frigates as countries engage in a new arms race to counter threats from Russia and China.

More than £27bn in orders had been secured so far with further agreements anticipated before the end of the year, the company said in a trading statement on Wednesday.

"Across the group, our portfolio aligns well with the national defence strategies of our customers and the recently announced spending increases across NATO provide a very supportive backdrop for growth over the medium term," it added.

"We expect significant opportunities across our business, including space systems, missile and air defence systems, electronic warfare, combat aircraft, combat vehicles, frigates, submarines, drones and counter drones among others."

Reporting by Frank Prenesti for Sharecast.com