Investing.com — on Wednesday raised shareholder payouts after defense orders climbed to a record level, as higher military spending across Europe and the United States supported revenue growth and cash generation.
The British defense company said its board recommended a final dividend of 22.8 pence, taking the total dividend for the year to 36.3 pence, an increase of 10%. It also repurchased 30 million shares during the year at a cost of £502 million.
Sales rose 10% on a constant currency basis to a record £30.7 billion, while underlying earnings before interest and tax increased 12% to £3.32 billion. Underlying earnings per share rose 12% to 75.2 pence.
Free cash flow totalled £2.16 billion, supported by customer advances received late in the year, partly offset by higher capital expenditure and increased research and development spending.
Order intake reached £36.8 billion, lifting the company’s order backlog to a record £83.6 billion. The book-to-bill ratio was 1.2.
Chief executive Charles Woodburn said the results showed “another year of strong operational and financial performance.”
Revenue under IFRS rose 8% to £28.3 billion, while operating profit increased 9% to £2.93 billion. Basic earnings per share rose 6% to 68.8 pence, reflecting higher amortisation charges linked to prior acquisitions.
Net debt, excluding lease liabilities, fell 22% to £3.84 billion at the end of the year. By sector, Electronic Systems recorded sales of £7.5 billion, up 8%, with underlying EBIT of £1.16 billion. Platforms & Services sales rose 17% to £5 billion, with underlying EBIT increasing 30% to £576 million.
Air sector sales rose 9% to £9.3 billion, while Maritime sales increased 11% to £6.8 billion, though Maritime underlying EBIT fell 3% to £457 million, reflecting early-stage programme maturity and capacity investment. Cyber & Intelligence sales were £2.4 billion, up 2%.
The company said guidance for 2026 was provided on the basis of an exchange rate of $1.32 to the pound, with sensitivity of approximately £500 million in sales and £70 million in underlying EBIT for a 10-cent movement in the pound-dollar rate.
BAE Systems said it returned £1.53 billion to shareholders during the year through dividends and buybacks.