BAE Systems shares jump on provisional Saudi Typhoon fighter jet deal

Shares end trading session over 2 per cent higher

Commenting on Friday’s provisional deal announcement, the group said that this was a '‎positive step towards agreeing a contract for our valued partner' (Getty)

Shares in BAE Systems jumped on Friday, spurred by news that Saudi Arabia had signed a provisional agreement with the UK Government to buy 48 Typhoon fighter jets – a much-needed shot in the arm for the defence company.

Shares in the group ended the session over 2 per cent higher on the day after the news hit.

BAE Systems employs some 83,100 people in over 40 countries and over 34,000 in the UK. It’s one of the leading providers of technology-led defence, aerospace and security solutions but has in recent years battled slowing demand for its Typhoon jets as well as currency headwinds stemming from a fall in the pound in the aftermath of Brexit.

Last month it said that earnings would be flat in 2018, as a result of lower production of its jets. Under chief executive Charles Woodburn, who joined the firm in July last year, BAE in October cut thousands of jobs in response to those pressures.

In December, however, a deal with Qatar to buy 24 Typhoons bolstered its outlook, and Mr Woodburn at the time said more deals could follow. The Qatari delivery is expected to commence in late 2022.

Commenting on Friday’s provisional deal announcement, the group said that this was a “‎positive step towards agreeing a contract for our valued partner”.

“We are committed to supporting the Kingdom as it modernises the Saudi Armed Forces and develops key industrial capabilities critical to the delivery of Vision 2030,” it said.