21 Feb 13. BAE Systems plc. PRELIMINARY ANNOUNCEMENT 2012 – RESULTS IN BRIEF.
2012 2011
Results from continuing operations
Sales1 £17,834m £19,154m
Underlying EBITA2
£1,895m £2,025m
Operating profit
£1,640m £1,580m
Underlying earnings3 per share: – including R&D tax benefit
n/a 45.6p
– excluding R&D tax benefit
38.9p 39.7p
Basic earnings per share4
32.8p 37.0p
Order backlog1,5
£42.4bn £39.1bn
Other results including discontinued operations
Dividend per share
19.5p 18.8p
Operating business cash flow6
£2,692m £634m
Net cash/(debt) (as defined by the Group)7
£387m £(1,439)m
FINANCIAL KEY POINTS
– Sales reduced by 7%
– Underlying EBITA reduced by 6% to £1,895m. Deferred recognition of sales and profit relating to the formalisation of price escalation on the Salam Typhoon programme
– Underlying earnings per share down by 2% (excluding the benefit in 2011 of the UK tax settlement)
– Order backlog increased by 8% to £42.4bn
– Non-US and UK order intake1 increased to £11.2bn from £4.8bn in 2011
– Total dividend increased by 4% to 19.5p
– Operating business cash flow6 increased to £2.7bn
– Net cash balance of £387m
– Three-year share repurchase programme of up to £1bn initiated
– Longevity risk on £2.7bn of pension scheme liabilities transferred to the insurance market
FT Comment: 21 Feb 13. BAE Systems launches £1bn share buyback. BAE Systems has launched a share buyback worth as much as £1bn spread over three years, in spite of the British defence company reporting declines in both full-year pre-tax profit and revenues. The UK defence contractor, which in October failed to complete a tie-up with European aerospace group EADS, said that constrained military budgets had resulted in 2012 sales shrinking 7.2 per cent year-on-year to £17.8bn. However, the group warned that the full £1bn of share buybacks would only be completed if BAE achieved “a satisfactory resolution of price escalation negotiations” in its delayed attempts to sell 72 Eurofighter Typhoon aircraft to Saudi Arabia. Ian King, BAE chief executive, said the group’s prospects warranted the return to shareholders. “There are a lot of green shoots in the business to show that the resilience is there, and that this is why we feel confident to do a share buyback,” he said. “We have made excellent progress in international markets. We have closed the year with a strong balance sheet and are well positioned for the future.”
BAE, which earns 40 per cent of its revenues in the US, also warned that this year’s sales would fall by £1bn should the US Congress implement its budget sequestration – automatic spending cuts of about $85bn in the fiscal 2013 year, under which military spending will take a big hit. Economists estimate that sequestration, if fully implemented, would trim US growth by 0.25 to 0.6 percentage points this year. The gloomy outlook was further exacerbated when BAE said it could be forced to axe 3,500 employees at its US shipbuilding operations should Pentagon cuts to maintenance contracts be implemented. BAE has 38,000 US staff, 5,000 of whom are in employed in ship repair. The cuts would affect BAE’s operations in Norfolk, Virginia, and San Diego, California, Mayport, Florida, and Hawaii. “We do not take these decisions lightly, and we regret the anxiety it causes our employees and their families,” said BAE. Europe’s biggest defence supplier by revenues on Thursday reported pre-tax profit of £1.37bn, down from £1.46bn, while diluted earnings per share contracted from 36.7p to 32.8p. A final dividend of 11.7p per share was proposed, boosting the full year payout 4 per cent to 19.5p. (Source: FT.com)
20 Feb 13. Curtiss-Wright Corporation (NYSE:CW) reported fin