BAE Systems has posted a 14% jump in arms sales to £28.3bn last year, a figure up on £25.3bn in 2023.

The defence giant has also forecast to break the £30bn mark in sales in 2025 as Governments around the world face pressure to increase military spending.

Weapons manufacturers have benefited from a hike in spending in the three years since Russia invaded Ukraine and as peace talks have continued to stall.

For BAE, which was posting its full-year results to 31 December, operating profit hit £2.7bn in 2024, while its order backlog grew by 11% to a record £77.8bn. Last year’s improved performance also included BAE’s acquisition of Ball Aerospace, now Space & Mission Systems (SMS), in February, which the company said contributed to an order backlog of £3bn.

“We’re supporting our customers around the world, while shaping our portfolio towards higher growth and strategically important markets,” BAE chief executive, Charles Woodburn, said. “Across our business, we’re also investing in our people, facilities and technologies to drive efficiencies, boost capacity and increase our agility to deliver in a rapidly evolving environment.

“Based on the exceptional visibility of our record order backlog and sustainability of our value-compounding business model, we remain confident in the positive momentum of our business into the future.”

BAE’s share price rose by 1% on the figures this morning to £13.50. Its shares have more than doubled in value over the three years since Russia’s invasion of Ukraine, which has lifted the company’s value to more than £40bn.

Equity analyst at Quilter Cheviot, Matt Dorset, commented that European defence stocks, including BAE, stand to “benefit significantly from the shift to increased defence spending”.

“Not only will larger defence budgets drive demand, but Europe is also likely to focus on enhancing its own defence production capabilities rather than relying on US exports,” Dorset commented.

“BAE, as a pureplay UK defence company with substantial exposure to European demand, is well-positioned to capitalise on this. The ongoing strategic defence review in the UK and the anticipated EU defence white paper are likely to emphasise the need for increased defence spending, further supporting BAE’s growth prospects.”

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