Despite delays over a major contract with Saudi Arabia, Britain’s BAE Systems has posted a smaller than expected fall in pre-tax profits. They were down more than six percent to the equivalent of 1.6 billion euros.
Investors were cheered by stronger overseas arms sales which translated into a higher dividend payout and a 1.16 billion euros share buyback plan.
However, Europe’s largest defence contractor offered a cautious outlook for this year because its home markets in Britain and the US are “constrained”.
“There are a lot of green shoots in this organisation which provides you with confidence that resilience is there and that’s another reason why we have confidence in the company to do a share buy back,” Chief Executive Ian King told reporters, citing BAE’s efforts to slash costs and increase overseas sales.
It is going ahead with the share buyback even though it said full implementation still hinged on the resolution of current discussions with Saudi Arabia over the pricing of a contract to supply the Gulf state with Typhoon aircraft.
Asked about the collapse of the proposed merger with rival European defence firm EADS in 2012, King said the company was “absolutely not” in discussions with EADS about reviving that tie-up and that BAE had moved on to focus on running its business.