BAE Systems has revealed that its full-year sales are set to grow by 10-12%, remaining in line with group expectations for the 2024 financial year, up from £25.3bn in 2023.

This comes as defence spending remains high across all of BAE’s sectors and key markets, with the group also expecting underlying profits to climb 11-13%, up from £2.7bn last year.

With the recent passing of the US supplemental aid package to Ukraine, as well as the commitment by the UK Government to spend 2.5% of GDP by 2030, the military contractor suggested it even has room to build “further positive momentum”.

BAE’s free cash flow is set to exceed £1.3bn, and after winning a contract to help the Australian Government deliver nuclear-powered submarines under the AUKUS security pact, the group said it was well-positioned in this area for further developments.

Chief executive at BAE Systems, Charles Woodburn, confirmed that the group’s trading so far this year has been “in line with expectations”.

“Operational performance continues to be strong, and our backlog and programme incumbencies underscore our confidence in our long-term value-creating model,” said Woodburn.

“We're continuing to deliver on mission critical requirements for our customers and progress our long-term strategic programmes within the elevated threat environment.”

In terms of capital distributions to shareholders, BAE also confirmed that the 2023 final dividend of 18.5 pence per share will be paid, subject to approval, on 3 June.

BAE has completed over 90% of its three-year share buyback programme of up to £1.5bn, which commenced in July 2022.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, commented that there had been “no big surprises” in BAE’s latest trading update.

“These growth figures are being boosted by the group’s acquisition of Ball Aerospace which closed back in February this year,” Chiekrie added. “The integration of the business is going well, with the newly renamed business, Space & Mission Systems, already securing a number of key contacts.

“The current £1.5bn three-year share buyback programme is moving full steam ahead, now 90% complete after less than two years. And thanks to impressive cash generation, it’s set to be followed up by another three-year buyback programme of the same size, putting extra cash back in shareholders’ pockets.”

BAE will announce its interim results for the first half of the year on 1 August.

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