Noel Davies, chief executive, said it would be several months before VSEL could assess the impact of the reported pounds 1bn spending cuts being sought by the Treasury.
'I think it is more likely we will see delays and reductions in orders rather than the complete cancellation of projects,' he added.
VSEL's share price reflected the concern, closing down 2p at 848p after initially rising 13p on the profit increase.
The review has cast a further shadow over the 6,500 workforce at VSEL's Barrow yard in Cumbria. The company has shed 11,000 jobs in the past five years, and although Mr Davies said he expected the workforce to settle at current levels 'it will very much depend on the defence review'.
With its bedrock contract for the four nuclear-armed Tridents 'progressing satisfactorily', VSEL is awaiting the go-ahead to tender for a further batch of Trafalgar Class submarines and for replacement troop assault ships.
VSEL also disclosed yesterday that it had teamed up with Hunting Engineering to bid to be the British contractor in the pan-European future frigate programme.
Discussions are continuing, meanwhile, with a prospective purchaser of its Cammell Laird shipyard on Merseyside, which closed at the end of July following the handing over to the Navy of the last Upholder Class submarine built there.
An increased interim dividend was declared of 10.5p (9p).Reuse content