Threat level, new submarine deal AUKUS boosts demand for BAE

BAE Systems, Britain's biggest defence company, said elevated threat levels from the war in Ukraine were continuing to boost sales, and in the longer term, the AUKUS submarine defence pact, would help deliver growth. Demand for weapons, ammunition and military equipment has soared as Britain, the United States and allies support Ukraine and look to shore up their own stocks, while in the Asia-Pacific region, growing threats are also driving military spend.

BAE Systems, Britain's biggest defence company, said elevated threat levels from the war in Ukraine were continuing to boost sales, and in the longer term, the AUKUS submarine defence pact, would help deliver growth.

Demand for weapons, ammunition and military equipment has soared as Britain, the United States and allies support Ukraine and look to shore up their own stocks, while in the Asia-Pacific region, growing threats are also driving military spend. AUKUS, the deal between the United States, Britain and Australia to provide Australia with nuclear-powered submarines, was signed in March and BAE said it would be "significant" for the company.

BAE also said that Finland's membership of NATO, which it joined in April, could lift sales with BAE's position in the Eurofighter Typhoon military jet and its shareholding in missile company MBDA likely to benefit as Finland raises defence spending to meet NATO commitments. For 2023, BAE expects earnings per share (EPS) to rise 5% to 7%, a guidance it stuck to on Thursday.

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