Half year report finds Royal Navy meeting expectations

BAE Systems has published a report about the Royal Navy which shows that it is so far meeting its expectations for this year.

The report found that, in terms of finance, the Royal Navy is meeting expectations as: sales increased up to £9.6 billion; underlying EBITA increased by 11 per cent to £945 million; underlying earnings per share increased by 14 per cent; operating business cash flow of £277 million; and a net debt of £1.7 billion.

Operational and statistic highlights include: the full £3.7 billion production contract for the initial batch of three Type 26 frigates was signed in June, with order intake of £2.8 billion in the period; received the full £1.4 billion contract for the sixth Astute Class submarine, and in April the fourth Astute boat was launched; secured a £417 million contract to provide 145 M777 ultra-lightweight howitzers to India; and the first two Typhoon aircraft for Oman arrived in the Sultanate of Oman in June.

The Royal Navy is meeting expectations as work has continued to ensure Portsmouth Naval Base is well prepared for the arrival of HMS Queen Elizabeth later this year, and milestones including the completion of a dedicated 70,000 square metre Centre of Specialisation containing facilities such as logistics support, security building, visitor centre and key infrastructure to support the carrier.

In March, the Solent Local Enterprise Partnership awarded the business £457,000 to design and deliver the UK’s first dedicated autonomous systems testing service; meanwhile, BAE Systems procured 48 electric vans to join the Portsmouth Naval Base fleet, supporting the Royal Navy’s operations.

Charles Woodburn, chief executive of BAE Systems, said: “BAE Systems’ performance in the first half was consistent with our expectations and guidance for the year. We have a sound platform for medium-term growth underpinned by a clear and consistent strategy.

“Strong programme execution, technology and enhanced competitive positions will be key in driving the business forward, and we will continue to focus on efficiency and meeting our customers’ affordability challenges.

“With the expected improvement in the defence budget outlook in a number of our markets, the group is well placed to continue to generate good returns for shareholders.”