Weapons manufacturer BAE Systems have said that because countries are building their military capabilities they have a record backlog of almost £70 billion.
BAE Systems said that due to the wars in Armenia, Gaza and Ukraine they have taken £37.7 billion in new orders.
The weapons manufacturer now has £69.8 billion worth of submarines, vehicles and missiles along with other high-tech equipment to deliver over the next few years.
BAE Systems said that now have a “high level of visibility of our revenues for many years to come,” some of their programmes will be running “well into the next decade.”
The British Ministry of Defence (MoD) have placed orders worth £4 billion for new nuclear submarines, called SSN-AUKUS which will be built for the UK and Australia.
BAE said that they have provided “support to our government customers and their allies to fulfil their primary obligations to keep citizens safe.”
Chief executive Charles Woodburn said, “We’ve delivered a strong operational and financial performance in 2023 and I’m extremely proud of the way our people have delivered cutting-edge equipment and services to our customers, working together with partners across our supply chain.
“Our performance, combined with our global footprint and record order intake, means we’re well-positioned for sustained growth in the coming years.”
BAE Systems said that their pre-tax profit soared to £2.3 billion from £2 billion the year before.
Roberto Rivero, Market Analyst at Admirals said, “Unsurprisingly, sales and underlying earnings increased in 2023, as had been expected, with BAE Systems’ order backlog hitting a record £69.8 billion.
Following the end of the Cold War, defence spending around the world relaxed as international tensions eased. However, the ongoing war in Ukraine and fresh conflict in the Middle East have forced many countries to reassess their defence capabilities and, consequently, their spending.
With defence firmly back in the forefront of government minds, BAE Systems, as one of the largest defence contractors in the world, has received an increase in demand for its products.
Looking forward, as the West continues to arm Ukraine whilst simultaneously ramping up spending on their own militaries, BAE Systems is likely to continue to see increasing demand.
Nevertheless, despite higher demand, labour shortages and supply chain disruption mean that defence companies have struggled to significantly increase production, which could remain an issue moving forwards.”
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