BAE Systems Predicts COVID-19 Impact In Next Three Months

BAE Systems said it expects “more significant disruptions” to business because of COVID-19 as it enters the second quarter of the financial year.

It comes after an opening three months where the coronavirus pandemic had little impact on the company. 

The defence firm said it was continuing to assess the situation and would inform shareholders whether to expect a dividend when it releases its half-year results.

BAE Systems also said it will make a decision on how much to pay its directors in July.

Many other London-listed companies have announced their top management and boards will take pay cuts during the pandemic.

"As the second quarter commences, we are seeing more significant disruptions," the company said.

"In the first quarter of 2020, the pandemic has had no material impact on the financial performance of the group.”

BAE Systems is involved in a number of projects across all three services of the Armed Forces.

The firm is currently upgrading the Army's Challenger 2 tank, while it is also involved in Typhoon and F-35B fighter jets, and the Navy's Astute-class submarines. 

Recently, BAE Systems won contracts to supply self-propelled howitzers, a missile-defence system and repair US ships.

The company said it is in a "strong position with a large backlog, mainly consisting of long-term government contracts across a wide international customer base".  

It also said its sites have reduced their operational levels with many staff working from home during the pandemic.

It added the proposed purchases of Collins Aerospace’s military global positioning system business and Raytheon’s airborne tactical radios business will still go ahead in the coming months. 

Meanwhile, the firm is working on the "rapid production" of ventilators for the NHS in response to the COVID-19 outbreak.

As part of the VentilatorChallengeUK Consortium, the company is aiming to help deliver thousands of ventilators in the coming weeks. 

Cover Image: BAE Systems shipyard at Barrow where Britain's nuclear submarines are built.