BAE Systems’ order backlog hits record levels as global defence spending booms

BAE Systems order backlog reached record levels in 2023, as defence spending boomed in the wake of the war in Ukraine and rising geopolitical tensions globally.

Britain’s premier defence contractor’s orrder backlog hit £69.8bn for the 12 months to 31 December, driven by an order intake of £37.7bn.

It followed a number of significant contract awards, including for the ‘AUKUS’ submarine program and Dreadnought nuclear deterrent submarines.

Sales of its military technology, which includes anything from nuclear submarines to Eurofighter-Typhoon jets, reached £25.3bn, up 9 per cent and ahead of analysts expectations.

Underlying earnings before interest and taxation (EBIT) came in at £2.7bn, also up 9 per cent, the firm said this morning.

Conflict in Ukraine and the Middle East has pushed defence spending up Western government’s agendas and prompted a surge in profits at the likes of BAE, Rolls-Royce and Chemring. BAE Systems share price is up nearly 40 per cent over the last 12 months.

The increased crop of orders means the Farnborough-based engineering giant is offering investors a final dividend of 18.5p, taking the total for 2023 to 30p, an increase of 11.1 per cent on the prior year. Subject to approval, this will be paid out in June.

Charles Woodburn, Chief Executive, said:”We’ve delivered a strong operational and financial performance in 2023 and I’m extremely proud of the way our people have delivered cutting-edge equipment and services to our customers, working together with partners across our supply chain.

“Our performance, combined with our global footprint and record order intake, means we’re well-positioned for sustained growth in the coming years. We’ll keep driving the business forward, investing in new technologies, facilities and our people.

He added: “This will help us deliver on our order backlog and help ensure our government customers stay ahead in an uncertain world, whilst delivering increased value to our shareholders and the communities where we operate.”