BAE Systems’ full-year sales in 2011 fell 14% to £19.2bn, following a difficult year for the global defence industry and an expensive period including acquisitions in markets such as cyber security.
BAE Systems posted headline sales of £19.2bn in its full year report today, down from £22.4bn in 2010.
Chief executive Ian King said “BAE Systems has delivered a robust underlying performance in a challenging business environment.”
Underlying earnings before interest, tax and amortisation (EBITA) fell to £2bn from £2.14bn in 2010. Despite a difficult year for defence contractors, the company’s operating profits held fairly stable, down just £21m to £1.58bn.
Illustrating the much lower cash flow in the 2011 financial year compared with 2010, net debt at BAE Systems, as defined by the group, rose to £1.4bn, from £242m.
Earnings per share at the world’s second biggest defence manufacturer, excluding R&D tax benefit, fell by a penny to 39.7p. While overall performance was down on 2010, investors got a lift as the dividend per share rose to 18.8p from 17.5p in 2010.
CEO Mr King said the company’s “robust performance’has enabled the board to increase the dividend by 7.4%, in addition to the £2.2bn returned to shareholders in the past two years.
“The Group’s strategy has established a resilient platform for the future as we grow our international, cyber and electronics businesses and drive value from our positions in the services sector and on key programmes,” he added.
Lower sales was in part due to delays on large programmes.
In the US, which represented 47% of the business last year, the company won significant new business in 2011, said Bloomberg analysts, but several large contract starts were delayed due to bid protests by competitors. One contract worth about £547m ($850m) over 10 years, to manage, operate and maintain the Radford Army Ammunition Plant in the US was awarded to BAE Systems in May 2011, but the programme start was delayed into early 2012. The US Army confirmed the award in January 2012, Bloomberg said.
The company said it is focused on a strategy to grow its international business, developing the cyber, intelligence and security segments, and the electronics systems businesses, in both civil and defence sectors.