TOP NEWS: BAE Systems Lifts Dividend As Sales Increase In 2020

(Alliance News) - BAE Systems PLC on Thursday rewarded shareholders with an increased dividend as ...

Alliance News 25 February, 2021 | 8:59AM
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(Alliance News) - BAE Systems PLC on Thursday rewarded shareholders with an increased dividend as it outperformed market expectations in 2020.

The Farnborough, England-based aerospace company said sales for 2020 rose 3.7% to GBP20.86 billion from GBP20.11 billion reported a year earlier. IFRS revenue rose to GBP19.28 billion from GBP18.31 billion year-on-year.

Underlying earnings before interest, tax and amortization slipped 0.4% to GBP684 million in 2020 from GBP687 million a year prior.

BAE Systems proposed a final dividend of 14.3 pence per share, taking the total payout for 2020 to 23.7p, up 2.2% year-on-year when including in the 2019 total the 13.8p final dividend that was deferred due to Covid-19. BAE said on Thursday it now will pay that 13.8p as an interim dividend in June.

The market was expecting BAE to report a 1.9% increase in sales but a 3.3% dip in Ebita, and a 2.6% rise in dividend.

The good news on payouts for investors came as BAE reported profit after tax in 2020 of GBP1.37 billion, down from GBP1.53 billion in 2019. Operating profit however edged up to GBP1.93 billion from GBP1.90 billion.

Order intake increased to GBP20.9 billion, and BAE said it has an order backlog of GBP45.2 billion.

Less positively, net debt ballooned to GBP2.72 billion from GBP743 million, after a GBP1 billion bond issue to fund BAE's UK pension scheme and also GBP1.7 billion in acquisitions.

"In 2021, we will continue to drive operational performance, progress our sustainability agenda and invest in high-end discriminating technologies to meet our customers' priorities, which will ensure we are well positioned to grow the business and contribute to the economic prosperity of the countries in which we operate," said Chief Executive Charles Woodburn.

BAE guided for sales to grow by 3% to 5% in 2021, with this improving to 5% to 7% excluding currency impact. Underlying Ebita is expected to increase by 6% to 8%, or 10% at steady currency rates. The company said this was based on expected improved performance from Platforms & Services in the US, continued expansion in Applied Intelligence, and a full year of contribution from the acquisitions in Electronic Systems.

Free cash flow is expected to be in excess of GBP1 billion in 2021, with a three-year target to 2023 of GBP4 billion.

BAE Systems shares were trading 0.7% higher in London on Thursday morning at 499.66p each.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
BAE Systems PLC 540.20 GBX 0.22

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