First-half sales came in at £15.8bn (£15.7bn expected), reflecting growth of 9% as all divisions contributed positively. Electronic Systems, Platforms & Services, and Air all grew at low double-digit rates.
Underlying operating profit rose 11% to £1.7bn (£1.7bn expected), driven by the top-line growth and improved margins.
Free cash flow improved from an outflow of £0.4bn to an inflow of £1.8bn (£0.0bn expected), reflecting a much higher level of pre-payments from customers. Net debt fell from £3.8bn to £3.2bn.
Full-year guidance has been raised, with sales now expected to grow by 8-10% (previously: 7-9%). Underlying operating profit growth is now expected to be between 10-12% (previously: 9-11%).
An interim dividend of 15.0p per share was announced, up 11%. Around £0.3bn of share buybacks were completed in the period.
The shares rose 1.0% in early trading.
Our view
HL view to follow.
BAE Systems key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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