BAE Systems' chief executive, Mike Turner, is to bow out on a high after Europe's largest defence group defied the worsening economic conditions to boost sales by more than 12 per cent as the wars in Iraq and Afghanistan continue to provide good business.
Mr Turner said yesterday: "Credit crisis, what credit crisis?" as he unveiled his last interim results after six years as chief executive and 42 years at the company. Ian King, currently the group's chief operating officer, will take over from Mr Turner at the beginning of next month.
Total sales at the defence group in the first six months of the year rose from £6.8bn in the first half of 2007 to £7.7bn a year on. Earnings before interest, tax and amortisation were up 26 per cent from £700m to £881m.
"We have once again delivered a robust performance across our operations," Mr Turner said, adding that the group had avoided the worsening economic conditions as it was a "classic defensive stock, excuse the pun".
In its results statement, the group said sales grew, particularly from clients "prioritising the provision of equipment and capability to their armed forces engaged in overseas operations". It also added that the acquisition earlier this year of Armor Holding, which makes protection for Hum-vees used by the US military, helped boost sales.
The group is predicting a strong second half to 2008, saying it expects "to benefit further from the current high demand for armoured wheeled vehicles to meet operational requirements". It added that the order book stood at £41bn.
BAE is in talks with potential partners to expand in India as well as expanding in the increasingly lucrative national security business. This was bolstered last week when it launched a £538m bid for Detica Group.
This week, the Law Lords supported the Serious Fraud Office's decision to drop an investigation of alleged bribery and corruption into a deal between BAE and Saudi Arabia. BAE denies any wrongdoing. Yet the group remains under investigation by the US Department of Justice over the same case.
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