The head of Britain’s biggest defense company has urged ministers to publish a long-delayed blueprint for military spending as soon as possible, as sales hit a record high following a global surge in demand after Russia’s full-scale invasion of Ukraine.
Charles Woodburn, chief executive of BAE Systems, said companies wanted clarity on how the money would be spent, adding that the Defense Investment Plan (DIP), due at the end of 2025, was holding back investment.
“We expect this before the end of last year and from an industry perspective we are keen to crack everything,” he said on Wednesday. “As far as we are concerned the sooner the better.
“Earlier clarity means the industry can plan and invest, run on our strong balance sheets … so it’s important for business to seek clarity. We want to see it published. [the DIP] As soon as possible.”
BAE reported its best ever financial results, with annual sales reaching £30bn for the first time, up 10% on last year. BAE shares rose 3.8% on the results, helping push the FTSE 100 to a record high.
BAE makes weapons ranging from tanks, aircraft and warships, as well as missiles and artillery. The company’s order backlog – the value of work already secured – hit a record £83.6bn, reflecting growing demand in NATO allies.
“It’s hard to escape the feeling that the brutal conflict in Ukraine has fast-tracked a decade’s worth of defense technology evolution in just a few years,” Woodburn said, adding that the period has led to an “unprecedented pace of technological change.”
At the Munich Security Conference last weekend, Keir Starmer argued for higher and more sustained defense spending to counter the threat from Russia and is reportedly considering accelerating plans to spend 3% of GDP on defence.
“We have to build our hard power because that is the currency of our age,” Stormer said. “We need to spend more, distribute more and coordinate more.”
Asked whether British industry could meet the growing demand, Woodburn said he was confident it could, but the government needed to provide more clarity on spending commitments.
He said: “We need a clear signal and a clear steer about what is needed. I think the way we have progressed in recent years is a good indication of what the industry can deliver when we are given a clear vision.”
In its new business last year, BAE won a contract from Turkey for 20 Typhoon fighter jets worth £4.6bn, as well as an order from Norway for Type 26 frigates.
The results came ahead of analysts’ expectations, which forecast profits to grow by up to 11% in the coming year. The company increased its dividend and took £36.8bn of new orders in the year, winning more work than it delivered.
BAE shares have risen sharply this year, valuing the company at more than £60bn, as investors bet on continued increases in defense budgets across Europe and beyond.
