BAE sees growth in 2023 as political tensions rise

Weapons maker BAE Systems held guidance as it said a weaker pound would provide a tailwind for reported annual earnings and sales and said it expected more growth next year due to an "elevated threat environment".

The company on Tuesday said it also expected to benefit from increased defence spending by countries in which it operates due to increased tensions brought on by Russia’s unprovoked invasion of Ukraine last February.

“Whilst global economic and fiscal pressures weigh on governments, the commitment to defence in our major markets remains robust. Most major defence programmes tend to be long cycle in the build and subsequent support phases,” the company saicd in a trading update.

“As a result, contracts secured now will be executed and traded for many years to come providing us with long-term growth visibility.”

BAE said it did not envisage a material impact from surging energy prices as it was well hedged in the UK and its other major markets were “relatively energy independent”.

"Looking forward, our large order backlog, diverse portfolio position and focus on programme performance position us well for another year of top line growth and margin expansion in 2023. We see sales growth coming from all sectors and opportunities to further enhance the medium-term outlook as our customers address the elevated threat environment."

Reporting by Frank Prenesti for Sharecast.com