Ukraine war increases demand for British submarines and armored vehicles

UK development of the Dreadnought class of submarineset to replace the Vanguard fleet in the 2030s, received £2.4bn from the Ministry of Defence.

BAE chief executive Charles Woodburn said: “Global threats across the world are now driving defense and security top of government spending priorities. And we are seeing that this is reflected in the numbers”.

Military orders worldwide rose 3.7% last year to $2.24 trillion (£1.75 trillion), according to figures from the Stockholm International Peace Research Institute released earlier this month. this year.

The company is in the first negotiations to establish arms production inside Ukraine after talks in May with Volodymyr Zelensky.

The FTSE 100 manufacturer of Challenger 2 tanks, artillery pieces and munitions crucial to the war against Russia will start by establishing a local office and exploring partnerships with local manufacturers.

Woodburn said the plan was “definitely progressing” and that BAE and the Ukrainian government were having “some good talks”.

Profit will outpace sales growth in the second half of the year as the company expects to book more high-margin jobs in its defense electronics business, which covers equipment for engine control, jamming systems and communications.

Since the beginning of the conflict in Ukraine, investor reluctance to buy shares in defense companies has moderated, said Mr. Woodburn.

He explained that before the war “particularly things like our involvement in the UK nuclear deterrent meant that a number of our traditional shareholders in London had put us on the wrong side of that debate.

“We see the pendulum now swinging towards a more balanced position of ethical considerations coexisting with the need for defense and security.”