It is a hard fact that a more unstable world is typically a driver of orders and ultimately revenue, profit and cash flow for defence companies.

Investors will therefore be watching the tenor of BAE Systems’ (BA.) third quarter trading update closely on 13 November now the world is facing up to conflict in the Middle East as well as confronting a grinding war in Ukraine.

Since the Russian invasion in February 2022, BAE shares have advanced more than 80%. The company’s results for the first six months of 2023 revealed double-digit increases in revenue and profit and, notably, the order backlog increased from £52.7 billion to £66.2 billion, which represents a record high.

The company has also subsquently announced (17 August) the $5.6 billion acquisition of Ball Aerospace, which makes ‘mission-critical space systems’ and produces ‘defence technologies across air, land and sea’.

BAE Systems said at the time the deal would further align the company with ‘the US intelligence community and department of defence’s highest priorities’.

Many analysts felt the price tag was steep, so it will be interesting
to hear management’s take on the role it sees the business playing in
the wider group and how the deal is progressing.

Another area in the spotlight is likely to be share buybacks. Management have acknowledged these will slow down, having already completed 70% of a £1.5 billion programme slated to run until the end of the first half of 2025 in little over a year. [TS]

UK UPDATES OVER THE NEXT 7 DAYS

FULL YEAR RESULTS

14 November:
Imperial Brands

15 November: Traces

FIRST HALF RESULTS

10 November: Kainos Group, British Land Company

14 November: Land Securities, Gear4music (Holdings), Castings, Babcock International, Marks Electrical, Oxford Instruments, Picton Property Income, DCC, ActiveOps

15 November: Renold, Intermediate Capital Group, Experian, Ninety One, Warehouse REIT

16 November: International Distributions Services, Burberry, Great Portland Estates, Assura, QinetiQ, Halma, Liontrust Asset Management, Investec, United Utilities, Tatton Asset Management

TRADING ANNOUNCEMENTS

10 November: Allianz Technology Trust

13 November: BAE Systems, HGCapital Trust

14 November: Convatec Group, Grafton Group, Hill & Smith

15 November: Aviva

16 November: Keller Group, Smiths Group

‹ Previous2023-11-09Next ›