BAe said that it had not received pounds 500m of a pounds 1.5bn downpayment by Saudi Arabia against the second part of the Tornado contract due to be signed this year. Analysts had taken account of the full payment in their earlier profit estimates because they had believed the full amount had been paid in June. Brokers still believe, however, that BAe will eventually receive the extra cash.
Smith New Court immediately cut its profit estimate for BAe by pounds 75m to give a loss for this year of pounds 1.075bn. The figure includes pounds 1bn in restructuring provisions. The shares initially dropped 12p but recovered to 157p before the market closed, down 5p.
'It is upsetting that the group is still misleading the City,' said one broker. 'They must have known about the cash shortfall since the summer.'Reuse content