BAE Systems Raises Dividend, Launches New Purchasing With Strong Prospects

LONDON, July 29 (Reuters) – British defense firm BAE Systems (BAES.L) lifted its annual outlook, raised its dividend and launched a new share buyback plan, after it said its programs to build submarines, fighter jets and other equipment were all ran smoothly.

BAE, whose main customers are the United States, Britain and Saudi Arabia, said it would increase its dividend to 9.9 pence, 5% more than last year’s interim payout, and would start in the coming years. with the share buyback of 500 million pounds ($697 million). 12 months.

The plan to boost investor returns, which will cause the company’s stock to rise more than 2% to begin with, stands out at a time when many companies have suspended dividends to save money and mitigate the impact of the COVID-19 pandemic. to mitigate the crisis.

The stock is up 15% in the past three months.

Defense is largely unaffected by the pandemic, with governments adhering to and in some cases increasing military and security commitments.

For the full year, BAE said it expected underlying earnings per share to grow 3% to 5% from last year’s earnings, even as the pound continued to strengthen against the dollar, marking an improvement versus of previous predictions.

BAE said the measures it took in 2020 to accelerate payments for its UK pension deficit helped its finances, as its commercial aviation unit began to recover during the period and its cybersecurity operations also improved.

Agency Partners analyst Nick Cunningham said the dividend payout was better than expected, noting that the buyback was BAE’s first since 2014.

BAE Systems said its confidence had been bolstered by progress in ongoing projects, as it provided electronic warfare systems for the F-35 fighter jet program, made automation improvements to ramp up combat vehicle production, and deployed the full output of F-35 rear fuselages.

In the first half to June 30, BAE’s underlying earnings per share rose 25% to 21.9 pence for the period, better than consensus forecasts of 20.0 pence.

($1 = 0.7177 pounds)

Reporting by Sarah Young; Editing by Kate Holton and Edmund Blair

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