BAE to plug pensions hole as profit rises

The business, which has a combat vehicles plant at Hadley Park in Telford, saw revenue hit £18.3 billion, an increase of seven per cent in 2019, chief executive Charles Woodburn has revealed.

Operating profit, meanwhile, grew to nearly £1.9 billion, up 18 per cent year on year.

Mr Woodburn said: "2019 has been a year of significant progress for BAE Systems. We delivered a good set of financial results in line with guidance, growing sales and earnings, with improved operational performance and increased investment in the business to underpin our growth outlook."

Apart from in aerospace, BAE's largest business unit which accounted for around 40 per cent of profit, operating profit grew in all business areas. The company operates in electronic systems, cyber and intelligence, platforms and services, and maritime.

During the year BAE signed a new deal to accelerate its delivery of the Typhoon fighter jet to Qatar. It also has a deal to provide Hawk training aircraft to the country's military.

BAE Systems also told shareholders that it had reached a new deal with its pension trustees to help plug a £1.9 billion hole in its pension pot.

The business will now make a one-off payment of £1 billion into the fund "in the coming months".

This will come alongside a £240 million payment over the course of the year ending March 2020, and a further £250 million over the following 12 months.

"Strategically we took a number of actions to strengthen the portfolio, and the pensions agreement announced today is good for all stakeholders," Mr Woodburn said.

"These will help to accelerate our strategy and further our growth outlook. We have a large order backlog and remain focused on strong programme performance to deliver a sustainable business model with enhanced financial performance."

Shares were up 2.2 per cent at 654p on Thursday morning.