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Tuesday, 02 September 2014

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BAE announces fall in profits but Barrow shipyard pulls in multi-billion contracts

PROFITS at the owners of Barrow’s shipyard dropped by seven per cent last year, it was announced yesterday.

BAE Systems released its accounts yesterday which showed sales reduced by seven per cent to £17.8bn in 2012 and the company has warned sales in the UK and US, which account for 20 per cent of business, are expected to be constrained for the year ahead.

However, contracts outside the two countries more than doubled last year to £11.2bn, leading to an eight per cent increase in its order backlog to £42bn.

With reduced activity in support of US operations in Iraq and Afghanistan, BAE has targeted growth in cyber, intelligence and security businesses.

It has also reduced headcount by 3,600 over the last year, bringing the total reduction over the past four years to around 26,000 worldwide.

Profits fell 6.6 per cent to £1.37 billion but BAE said that it expected a return to earnings per share growth this year, subject to near-term uncertainties in US budgets and the final terms of a key fighter jet contract with Saudi Arabia.

Barrow’s shipyard secured a number of high value contracts including £1.2bn for the design, build, test and commissioning of Audacious, the fourth submarine in the Astute class and two awards of £328m and £314m for ongoing design work on the Successor programme to replace the Vanguard class submarines.

John Hudson, Managing Director of Maritime – Submarines, said: “Delivery of the second Astute class submarine Ambush was a hugely significant milestone for the business and everyone within the submarine enterprise.

“To then gain contract acceptance in December, just three months after it left Barrow, was a major success, further highlighting the progress we have made across the submarine programme, as well as demonstrating the fantastic capabilities of the Astute class.

“It was especially pleasing to see significant order intake in the year, with orders for further submarines, design of the Successor submarine and combat systems support.

“These orders indicate growing confidence from our customer.”

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