BAE Systems profits fall

But the company, which has a site in Telford, said it expected a stronger second half to bolster profits for the year.

BAE said sales fell seven per cent to £8.8 billion over the period, “as a result of reduced Typhoon production activity,” while operating profit fell 11 per cent to £792 million. In recent years a lack of orders for the fighter jets has forced BAE to scale back production and cut nearly 2,000 jobs.

BAE has an armoured vehicle maintenance division in Hadley Park, where it employs about 300 people.

Sales from the group’s US platforms and services arm fell eight per cent, while those in its air division fell 11 per cent.

Recent contract wins, including a $35 billion deal to deliver nine ships to Australia and £5 billion worth of Typhoon and Hawk aircraft to Qatar, failed to lift profits, since they will fall in BAE’s H2 reporting figures. However, the group’s total order backlog rose three per cent to £39.7 billion in the six months.

Chief executive Charles Woodburn, who joined the company in July 2017, said: “We have made good progress in the first half strengthening the outlook through significant wins on the Australian SEA 5000 and US Amphibious Combat Vehicle programmes. These, combined with the launch of the UK Combat Air Strategy, provide good momentum into the second half and beyond."

However, he noted there had been “disappointments” on certain longstanding maritime and platforms and services programmes in the US. He said the group had taken steps to “strengthen management and improve programme execution” in this area, and that lower earnings would be offset by higher earnings in BAE’s electronic systems and cyber and intelligence arms in the second half of the year.

Mr Woodburn reiterated BAE’s earnings guidance for the year, with underlying earnings per share for 2018 expected to be in line with those for 2017, and said a strong order book would help deliver growth. The group’s interim dividend rose two per cent to 9p per share.

The group also said its applied intelligence business – which incurred a £4 million loss – was undergoing a restructuring to return it to profitability, and had achieved a “much improved first half performance.”

In March the UK government also signed a memorandum of intent to supply 48 Typhoon fighter jets supplied by to Saudi Arabia. However, a final contract has not yet been agreed.