📝 Greetings! Brian Donnelly here with this afternoon's edition, looking at BAE Systems' City trading statement.

A UK engineering giant with a significant presence in Scotland has been given "further positive momentum” and multi-year revenue visibility after governments cemented their future defence plans.

BAE Systems has said UK Government defence spending commitments and the recent US military aid deal for Ukraine helped it keep its expectations on track.

It came as the head of the London-listed arms firm said it has seen a "strong" operational performance and is set to meet its targets for the year.

BAE said its forecasts remain unchanged and, therefore, is due to deliver sales growth of between 10% and 12% this year.

It said it is also predicting underlying earnings growth of between 11% and 13% for the year.

The group said it is currently witnessing "high" levels of defence spending across its sectors and key markets.

"The recent passing of the US supplemental aid package to Ukraine and the commitment by the UK Government to spend 2.5% of GDP by 2030 should build further positive momentum," it added.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Defence spending remains high across the group’s sectors and key markets. Many governments are even expected to continue raising their defence budgets amid escalating global tensions.”

He said the firm “looks set to capture a good chunk of this extra spending”, adding: “The orders placed with BAE are typically long-cycle too, spread over several years, so it gives the group multi-year revenue visibility. An enviable asset to have in uncertain times.”

The company employs almost 4,300 people across Scotland, including at its Naval Ships business in Glasgow, where a new hall is being built (pictured), manufacturing facilities at Hillend, regional aircraft operations in Prestwick and at RAF Lossiemouth.

BAE Systems’ advanced manufacturing programmes, including the construction of eight Type 26 frigates in Glasgow, "support a vibrant supply chain in Scotland and are driving recruitment for hundreds of roles in Scotland".

Last month, Prime Minister Rishi Sunak promised an extra £75 billion in defence spending over the next six years as part of his Government's commitment.

BAE Systems pointed to a number of major contract awards including a $754 million (£604 million) production deal for armoured multi-purpose vehicles.

It also highlighted that it is currently integrating the Ball Aerospace business it acquired earlier this year, for around £4.4 billion.

It said the business, which has been renamed Space & Mission Systems has made a "good start" to the year.

Charles Woodburn, BAE Systems chief executive, said: "Trading so far this year has been in line with expectations.

"Operational performance continues to be strong and our backlog and programme incumbencies underscore our confidence in our long-term value-creating model.

"Our global presence and diverse portfolio of products and services provide high visibility for top-line growth, margin expansion and cash generation in the coming years."

Analyst Mr Chiekrie also said: “The integration of the business is going well, with the newly renamed business, Space & Mission Systems, already securing a number of key contacts. The current £1.5bn three-year share buyback programme is moving full steam ahead, now 90% complete after less than two years. And thanks to impressive cash generation, it’s set to be followed up by another three-year buyback programme of the same size, putting extra cash back in shareholders’ pockets.”

📈 Insurance giant Phoenix Group Holdings shares were up 2.56% at 521.5p at 15:23

📉 HSBC bank shares were down 1.46% at 693.7p at 15:23

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