BAE SYSTEMS PLC Trading Statement (6930G)
November 08 2018 - 1:00AM
UK Regulatory
TIDMBA.
RNS Number : 6930G
BAE SYSTEMS PLC
08 November 2018
8(th) November 2018
BAE Systems - Trading update
Trading update
The Group's outlook for 2018 remains unchanged. Overall, we
expect the Group's underlying earnings per share for 2018 to be in
line with the full-year underlying earnings per share for 2017,
with some small additional benefit from exchange translation.*
* Compared with the Group's actual performance for 2017 as
re-presented to reflect the impact of the adoption of IFRS 15 from
43.5p to 42.1p and assuming a US$1.35 to sterling exchange rate
UK Market
In the UK, the recently announced budget re-emphasised the UK's
commitment to strong defence and security and the company focus
remains on execution of our long term contracted positions in Air
and Maritime. The production ramp up of the F-35 programme is
progressing well. On the Offshore Patrol Vessels programme work
continues to rectify the quality issues on the first ship, with
lessons learned being applied to the other ships in build. The
second ship is due to commence sea trials in November. The Type 26
programme is on track for the first of class contractual date in
the mid 2020s and the strengthened management team in Barrow is
delivering improved performance on both the Astute and Dreadnought
submarine programmes. Flight trials are on-going on HMS Queen
Elizabeth off the coast of the US and are progressing to plan.
The UK-managed Applied Intelligence business remains on track to
achieve a breakeven position by year end.
The final agreement of the terms of the UK's exit from the EU
after March 2019 will be important to enable companies to prepare
for potential changes in the regulatory environment. There is
relatively limited UK-EU trading and movement of EU nationals into
and out of BAE Systems' UK businesses and the resulting Brexit near
term impacts across the business are likely to be limited. BAE
Systems will support the UK government in achieving its aim of
ensuring that the UK maintains its key role in European security
and defence post-Brexit, and to strengthen bilateral relationships
with key partners in Europe.
US Market
On 28 September, the fiscal year 2019 Defense Appropriations
bill was enacted providing near-term clarity and support for the
industry.
The enacted bill maintains support for our medium-term planning
assumptions and positive momentum for military readiness and
modernisation programmes. This includes many key BAE Systems
programmes such as combat vehicles, F-35, electronic warfare
programmes, and current and future precision-weapons systems. As
the US-based business executes on its strong order backlog the
Group remains focused on meeting the challenges of rapid growth.
Within US Platforms and Services we have further strengthened
management in the combat vehicles business where necessary process
and automation improvements are in preparation to meet the
significant production ramp and to overcome initial issues of
acceleration.
US Ship repair utilisation levels remain high across our
facilities with the backlog further strengthened with the $146.3m
contract award in August to modernise the USS Gettysburg.
International Markets
The cGBP5bn Qatar Typhoon and Hawk programme, effective in
September and in the order backlog, stabilises Typhoon production
into the next decade and also extends Hawk production. Whilst a
degree of geopolitical turbulence exists, the potential pipeline
for Typhoon remains positive with opportunities both with partner
nations and through exports.
In Australia, work continues on negotiating the design and
development scope for the Hunter Class frigate programme, with
signature of the contract expected in the coming months.
In October, the Canadian Government announced that it had
selected Lockheed Martin Canada, using BAE's Type 26 design, as its
preferred bidder for the Canadian Surface Combatant programme. The
bid is now in the negotiation stage.
Interim Dividend
The Interim dividend of 9.0 pence per share will be paid on 30
November 2018.
Full year results
BAE Systems will announce its financial results for the year
ending 31 December 2018 on 21 February 2019.
Cautionary statement
All statements other than statements of historical fact included
in this statement are forward-looking statements. Such
forward-looking statements, which reflect management's assumptions
made on the basis of information available to it at this time,
involve known and unknown risks, uncertainties and other important
factors which could cause the actual results, performance or
achievements of BAE Systems or the markets and economies in which
BAE Systems operates to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. BAE Systems plc and its directors
accept no liability to third parties in respect of this statement,
save as would arise under English law. Accordingly, any liability
to a person who has demonstrated reliance on any untrue or
misleading statement or omission shall be determined in accordance
with section 90A of the Financial Services and Markets Act
2000.
Issued by:
BAE Systems plc
London
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END
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