Hit to cyber security business leads to drop in operating profits at BAE Systems

Defence giant BAE Systems has reported a drop in operating profits after a hit to its cyber security business.

The weaponry manufacturer, which employs 1,350 people in Marconi Way, Rochester, said lower growth forecasts for its applied intelligence division put a £384 million dent on its finances.

It added it expects earnings per share to flatline this year.

BAE Systems' base in Rochester
BAE Systems' base in Rochester

Although operating profit was down 15% to just below £1.5 billion, sales increased 3% to £19.6 billion while underlying earnings were up 7% to more than £2 billion.

Chief executive Charles Woodburn said: "We delivered a good performance in 2017, consistent with our expectations for the year.

"We start 2018 with a streamlined organisation and a strong focus on programme execution, technology and enhanced competitiveness, providing a solid foundation for medium-term growth.

"With an improving outlook for defence budgets in a number of our markets, we are well placed to generate good returns for shareholders."

In contrast to the cyber security business, BAE's Rochester site is undergoing a period of growth.

It has 68 staff vacancies and expects to hire bout 500 new staff by 2022 to cope with the forecasted workload.

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