BAE Systems profits up 22%

BAE Systems, Europe's largest defence company, has reported a 22 per cent increase in profit to £1.48 billion for 2007 and forecast continued growth for 2008.

Full-year sales were up 14 per cent to £15.71 billion, while earnings per share rose 30 per cent to 32p.

US-led businesses delivered 50 per cent of the group's underlying profit, BAE said, with acquisitions helping to lift sales.

The company's July 2007 takeover of Armor Holdings, which makes armoured vehicles, gave BAE a leadership position in the land sector and contributed £77 million to profits.

In the UK, continued British involvement in Afghanistan and Iraq has resulted in orders in excess of £400 million.

BAE also secured a major contract during the year with the government of Saudi Arabia for the delivery of 72 Typhoon aircraft, with delivery of the first aircraft scheduled for June 2009.

In a statement, BAE said: "We have excellent forward visibility and a further year of good growth is anticipated in 2008, including a full year contribution from the former Armor Holdings business."

The dividend was increased 13.3 per cent to 12.8p per share for the year. Shares in BAE rose 1.32 per cent in morning trading to £4.78.