BAE SYSTEMS PLC Trading Statement (1739T)
October 10 2017 - 5:00AM
UK Regulatory
TIDMBA.
RNS Number : 1739T
BAE SYSTEMS PLC
10 October 2017
10(th) October 2017
BAE Systems - Trading update and organisational announcement
Trading update
Trading for the period has been in line with management
expectations and the Group's outlook for 2017 remains unchanged. In
aggregate, we expect the Group's underlying earnings per share for
2017 to be 5% to 10% higher than full-year underlying earnings per
share in 2016 of 40.3p and we continue to expect a small reduction
in net debt compared with 31 December 2016.
In the US, a Continuing Resolution went into effect on the 1(st)
October under which the Group does not expect any material impact.
The US defence market outlook remains positive and the production
ramp up on a number of the Group's long term programmes in the
Electronic Systems and Combat Vehicles businesses is progressing to
plan and positions the US business for growth in the medium
term.
Export campaigns in all domains continue to be well supported by
the UK government. A Statement of Intent for the purchase of 24
Typhoon and 6 Hawk aircraft was signed by the government of Qatar
with the UK Ministry of Defence in September. Although there can be
no certainty as to the timing of additional orders, discussions
with current and prospective operators of the Typhoon aircraft
continue to support the Group's expectations for future Typhoon
contract awards.
In the UK, we are making good progress working with our MoD
customer on the Dreadnought and Type 26 programmes and, in August,
HMS Queen Elizabeth arrived in Portsmouth following successful
initial sea trials. The UK Government's National Shipbuilding
Strategy was published in September and confirmed a commitment to
build eight Type 26 Frigates at BAE Systems' Glasgow shipyards and
continued support for export opportunities.
Re-organisation and rationalisation announcement
From 1 January 2018, BAE Systems will implement organisational
changes across the Group, other than at its US-managed business,
BAE Systems, Inc. These changes will drive competitiveness;
accelerate technology innovation; and deliver continued
improvements in efficiency and operational excellence. The current
Platforms & Services (P&S) UK and P&S International
management structures will be removed with the organisation
streamlined and strengthened Air and Maritime sectors created.
In addition, a new role of Chief Technology Officer is being
created to enable more effective prioritisation, investment and
exploitation of technology.
The revised structure is consistent with, and builds on the
focus areas outlined at the half year results of operational
excellence, competitiveness and technology. The new air sector will
bring together our international capabilities and expertise to
compete more effectively for international opportunities and
collaborations.
To ensure production continuity at competitive costs over the
medium term and based on the profile of currently contracted and
expected aircraft deliveries, actions continue to be taken to
reduce the Group's current Typhoon and Hawk production rates. As a
result, the Group has today announced a proposal to reduce the
workforce of the Military Air & Information business by up to
1,400 roles.
Additionally, and to enhance our competitive position we have
announced a proposed work force reduction in our Maritime Services
business of around 375 roles.
Further, the Applied Intelligence business is planning a
refocused and more efficient operating model and have announced a
proposed workforce reduction of up to 150 roles.
The resultant charges associated with these actions are included
in the re-confirmed 2017 earnings guidance.
Board Directors
Effective from 1 November 2017, Peter Lynas, Group Finance
Director and Executive Board Director, will assume responsibility
for UK Shared Services, Procurement and Group Mergers &
Acquisitions in addition to his existing responsibilities.
Interim Dividend
The Interim dividend of 8.8 pence per share will be paid on 30
November 2017.
Full year results
BAE Systems will announce its financial results for the year
ending 31 December 2017 on 22 February 2018.
Investment Market WebEx/Call
In November, the Group will hold a WebEx/call for analysts and
investors to run through the changes and reporting impacts of
moving to this new organisational structure. On that call, the
Group will also address the move to adopt accounting standard IFRS
15 from 1(st) January 2018.
Cautionary statement
All statements other than statements of historical fact included
in this statement are forward-looking statements. Such
forward-looking statements, which reflect management's assumptions
made on the basis of information available to it at this time,
involve known and unknown risks, uncertainties and other important
factors which could cause the actual results, performance or
achievements of BAE Systems or the markets and economies in which
BAE Systems operates to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. BAE Systems plc and its directors
accept no liability to third parties in respect of this statement,
save as would arise under English law. Accordingly, any liability
to a person who has demonstrated reliance on any untrue or
misleading statement or omission shall be determined in accordance
with section 90A of the Financial Services and Markets Act
2000.
Issued by:
BAE Systems plc
London
This information is provided by RNS
The company news service from the London Stock Exchange
END
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