BAE Systems maintains guidance amid solid trading

(Sharecast News) - BAE Systems said in an update on Wednesday that trading so far this year had been in line with expectations, reaffirming its full-year 2025 guidance as it highlighted strong operational performance and a robust order backlog. The FTSE 100 defence specialist said in a statement ahead of its annual general meeting that it was maintaining its outlook for revenue growth of 7% to 9% and an 8% to 10% rise in both underlying EBIT and underlying earnings per share, based on 2024 comparatives.

Free cash flow was expected to exceed £1.1bn.

The company said its forecast remains based on a constant GBP-USD exchange rate of 1.28, consistent with last year's average.

Recent contract wins included a $356m award for long-lead procurement of armoured multi-purpose vehicles, a near-$800m extension of its integration support contract with the US Air Force, and more than $360m in amphibious combat vehicle contracts from the US Marine Corps.

Additional orders include artillery and radar systems for nearly $300m, domestic and export missile system awards of around £600 million via MBDA, and the next phase of Canada's River-class destroyer programme.

BAE said global defence spending trends continue to support long-term growth.

The UK's commitment to raise defence spending to 2.5% of GDP from 2027, along with rising budgets across Europe, the US, Asia-Pacific and the Middle East, was expected to present further opportunities.

The group noted that its product portfolio was well aligned with capability priorities across its core markets.

BAE said it was continuing to invest heavily in capacity, infrastructure and innovation, following record R&D and capital spending in 2024.

Major investments included a new shipbuild assembly hall in Glasgow and a repair complex in Florida, both due to become operational this summer.

The company said it was planning to recruit over 2,400 early-career roles in the UK this year to support future growth.

Subject to shareholder approval, a final dividend of 20.6p per share would be paid on 2 June.

As of 6 May, £392m of BAE's three-year, up-to-£1.5bn, share buyback programme had been completed.

"We've had a strong start to 2025 and are maintaining our guidance for the full year," said chief executive officer Charles Woodburn.

"During this time where the defence and security landscape is rapidly evolving, we are focused on delivering our long-term programme commitments to our customers, while investing in our business to boost capacity, drive efficiencies and shape our portfolio to support future growth."

The group said it would report its interim results for the six months to 30 June on 30 July.

At 0941 BST, shares in BAE Systems were down 0.57% at 1,760.5p.

Reporting by Josh White for Sharecast.com.