- Defence giant not yet seeing impact on US business as order climb
British defence giant BAE systems has warned a prolonged shutdown of the US government could hinder booming trade, as military spending continues to grow globally.
The FTSE 100 group has secured orders worth more than £27billion in 2025 so far, bolstered by recent multi-billion-pound deals to sell fighter jets, warships and other defence systems to governments around the world.
BAE, which expects 2025 revenues to grow by as much as 10 per cent on the £28.3billion achieved last year, on Wednesday flagged a £4billion Typhoon aircraft deal with Turkey and around £1.3billion in funding for US combat vehicle production among recent wins.
Boss Charles Woodburn said: ‘These programmes not only strengthen national security, but also support thousands of skilled jobs and generate significant export value for the UK economy.’
But the group told shareholders that if the ongoing shutdown of the US government persists ‘delays to contract funding and timing of payments before year end are possible’.
BAE said it was ‘encouraged by the momentum in Congress’ to end the shutdown and assured investors it does not currently see ‘material effects on our US business’.
BAE flagged a £4billion Typhoon aircraft deal among recent wins.
It added: ‘Our portfolio aligns well with the national defence strategies of our customers and the recently announced spending increases across Nato provide a very supportive backdrop for growth over the medium term.
‘We expect significant opportunities across our business, including space systems, missile and air defence systems, electronic warfare, combat aircraft, combat vehicles, frigates, submarines, drones and counter drones among others.’
BAE Systems to hand £1.5billion to investors in total this year, comprising the final dividend for 2024, the interim dividend for 2025 and £500million of share repurchases.
BAE Systems shares were up 0.4 per cent at 1.808p in early trading, having added more than 56 per cent since the start of 2025.
Garry White, chief investment commentator at Charles Stanley, said: ‘BAE Systems’ third-quarter update reinforced its status as one of the FTSE 100’s standout performers, with strong revenue growth and a bulging order book underscoring the global surge in defence spending.
‘BAE’s challenge is not demand, it is delivery. Management needs to keep costs under control and deliver on time, especially when it comes to long-duration programmes such as submarines and fighter jets.
‘The risk for BAE is now in the company’s execution, but this third-quarter update reinforces the positive investment case surrounding its shares.’
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