BAE Systems profits rise as Telford merger beds in
Defence giant BAE Systems delivered rising profits in its first results since the transformation of its Telford-based tank maintenance operation.
The latest results from BAE show that following the takeover of a majority stake in its Telford-based land combat vehicles business by German company Rheinmetall, new contracts are on the way.
Looking forward, the joint venture to create a joint UK-based military land vehicle design, manufacturing and support business is positioned to pick up a share of the British Army's anticipated Mechanised Infantry Vehicles order, and to supply other services relating to combat vehicles – essentially referring to tanks and armoured cars.
The company saw its operating profits rise to £896 million for the half year to June 30, compared to £792 million for the same period in 2018.
Sales increased by four per cent to £9.4 billion, meanwhile.
Chief executive Charles Woodburn said: "The first half performance underpins our guidance for the full year with improvements being made on a number of operational fronts.
"Our priority is to deliver consistent and strong operational performance for our customers and shareholders to enable us to meet our growth expectations over the medium term."
The results show that the deal saw Rheinmetall buy a 55 per cent stake in the Telford-based combat vehicles business for £31.4 million, with BAE retaining the remaining 45 per cent share.
It was formally completed at the beginning of July.
The combined operation will be centred on the facility at Hadley Park in Telford, which has long been BAE's main centre for maintenance of the UK's tanks, armoured vehicles, and military bridges which can be quickly deployed in the field for crossing rivers and ravines.
At the unveiling of the unified business on July 1, the then-Defence Minister Stuart Andrew said the unified operation would sustain 450 jobs.
The work with Rheinmetall has also seen it agree to supply 155mm ammunition to that company's customers – although the deal which brought the two companies together did not include BAE's munitions business.