BAE Systems has recorded £12bn in sales across the first half of 2023, with a record order backlog.

The company said on Wednesday that it had won a record £21.1bn of new orders in the first six months of the year, underpinned by new orders for existing programmes including submarines and fighter aircraft. Its order backlog also hit a record at £66.2bn.

Sales in the first half climbed 11 per cent to £12bn, BAE said, while its underlying earnings before interest and tax were up 10 per cent to £1.3bn. The group’s free cash flow increased almost tenfold to £1.1bn.

For the full year, BAE said it now expected to generate more than £1.8bn in free cash flow, about £600m higher than previously forecast. 

The company will be one of the main beneficiaries of the AUKUS submarine building programme announced by the UK, Australia and the US earlier this year. It is also part of plans for a next-generation fighter jet programme between the UK, Italy and Japan.  AUKUS will initially focus on helping Australia procure a multibillion-pound fleet of nuclear-powered submarines. Barrow will play a unique role in delivering the programme.

The three nations will deliver a trilaterally developed submarine based on the UK’s next generation design, incorporating technology from all three nations. Australia and the UK will operate SSN-AUKUS, as their submarines of the future, with construction expected to begin this decade.

READ MORE: Barrow MP hosts meeting on its unique role in AUKUS plans

Chief executive Charles Woodburn said: “We’ve delivered a strong financial performance in the first half of the year, thanks to the outstanding efforts of our employees.

“Our global footprint, deep customer relationships and leading technologies enable us to effectively support the national security requirements and multi-domain ambitions of our government customers in an increasingly uncertain world.

“With a record order backlog and good operational performance, we’re well positioned to continue delivering sustained growth in the coming years, giving us confidence to continue investing in new technologies, facilities, highly-skilled jobs and in our local communities.”

Group finance director Brad Greve said: “This is a strong set of half-year results delivering good sales and earnings growth, and giving us confidence to increase our year-end guidance for sales, underlying EBIT, underlying earnings per share and free cash flow. The record order backlog and continued good operational performance gives us more visibility and confidence in our three financial priorities - sales growth, margin expansion and high sustained cash conversion, operating under a disciplined capital allocation policy.”