DEFENCE giant BAE Systems has reported a drop in annual sales.
The company’s full year results show revenues fell 14 per cent to £19.15bn in 2011 while underlying profits dropped seven per cent to £2bn.
The drop in revenue was mainly due to a cut in orders from the US army after it pulled out of Iraq and the delay of an order for jets from Saudi Arabia.
In September last year, BAE said it would cut 3,000 jobs including 800 at its sites in Warton and Preston.
Hopes for 2012 lie with development of unmannned aircraft.
Chris Boardman, managing director of Military Air and Information (MAI), said “work on unmanned air systems puts us in an excellent position to capitalise on future opportunities.”
He added talks would continue in a bid to secure a deal with the Indian Air Force for Typhoon.
He said: “2011 was a challenging year for MAI.
“While continuing to deliver against customer commitments, including supporting frontline operations in Libya, we have had to make difficult decisions to reduce costs and improve efficiency so that we can shape the business for success in the future.
“International campaigns will play an increasingly important role in the development of the business.
“There are also opportunities for Typhoon in Oman, where we have received a request for proposal, Malaysia and the UAE. Despite the recent news for Typhoon in India, we continue to believe that Eurofighter Typhoon offers the best military, industrial and economic solution for the Indian Air Force and we will continue to support the Indian customer with their evaluation process.
“Our continued partnership with Lockheed Martin on the F-35 Joint Strike Fighter programme will remain an area of focus and, outside air platforms, the training and information sectors also offer significant opportunities for continued development.”
Fylde MP Mark Menzies said the drop in revenue was not a surprise.
He added: “This is why myself, colleagues and the Government are working hard to promote exports and recently committed £40m to the UCAV (Unmanned Combat Air Vehicle) programme. In doing so the Government is investing in the future of BAE and, in particular, BAE in Lancashire.”
Bottom-line profits rose four per cent to £1.5bn helped by a £197m tax rebate.
Shares fell four per cent even though BAE increased its dividend by seven per cent as a sign of its future confidence.