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BAE Systems expects Covid-19 shock to hit in next three months

The company said the pandemic had ‘no material impact’ in the first quarter of the year.

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BAE said two acquisitions are still expected to go ahead (BAE Systems/PA)

BAE said two acquisitions are still expected to go ahead (BAE Systems/PA)

BAE said two acquisitions are still expected to go ahead (BAE Systems/PA)

BAE Systems has said it expects “more significant disruptions” to business as it enters the second quarter of the financial year, after an opening three months where the coronavirus pandemic had little impact.

The company said it was continuing to assess the situation and would update shareholders on whether to expect a dividend in July when it releases half-year results.

The defence firm will also take a decision on how much to pay its directors at that point. Many other London-listed companies have announced their top management and boards will take pay cuts while the crisis lasts.

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

The company is in a strong position with a large order backlog, mainly consisting of long-term Government contracts across a wide international customer baseBAE Systems

It added: “In the first quarter of 2020, the pandemic has had no material impact on the financial performance of the group.”

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

It said the company’s annual shareholder meeting will not be held in person, as groups of more than two people are banned from meeting up. Instead, shareholders can vote online and in the post.

BAE said: “The company is in a strong position with a large order backlog, mainly consisting of long-term Government contracts across a wide international customer base.”

Many staff are working from home during the pandemic and sites have reduced their operational levels, BAE said.

It added that is proposed acquisitions of Collins Aerospace’s military global positioning system business and Raytheon’s airborne tactical radios business will still go ahead in the coming months. The financing is already in place.

BAE said: “Whilst the Covid-19 pandemic will impact our previous guidance for 2020, at this stage it is not possible to predict either the duration of the disruption or its impact on the 2020 outturn. A further update will be provided when appropriate.”

PA