BAE Systems shares rose after the defence giant hailed a “year of significant progress” with the company showing strong results and announcing a new deal under its pension.

The business saw revenue reach £18.3 billion, an increase of 7%, in 2019, chief executive Charles Woodburn told the London Stock Exchange. Operating profit, meanwhile, grew to nearly £1.9bn, up 18% year on year.

Mr Woodburn said: “We delivered a good set of financial results in line with guidance, growing sales and earnings, with improved operational performance and increased investment in the business to underpin our growth outlook.”

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Apart from in aerospace, BAE’s largest business unit which accounted for around 40% of profit, operating profit grew in all business areas. The company operates in electronic systems, cyber and intelligence, platforms and services, and maritime.

During the year BAE signed a new deal to accelerate its delivery of the Typhoon fighter jet to Qatar. It confirmed a deal to provide Hawk training aircraft to the country’s military.

Construction also started on second of the three contracted Type 26 frigates in August, the company said.

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Workers at its bases in Scotstoun and Govan currently have orders for three Type 26 frigates initially with a commitment for another five, which would last until the 2030s.

BAE Systems also told shareholders that it had reached a new deal with its pension trustees to help plug a £1.9bn hole in its pension pot.

The business will now make a one-off payment of £1bn into the fund “in the coming months”.

This will come alongside a £240 million payment over the course of the year ending March 2020, and a further £250m over the following 12 months.

Mr Woodburn also said: “Strategically we took a number of actions to strengthen the portfolio, and the pensions agreement announced today is good for all stakeholders.”

Shares rose by 2.6%, or 16.4p, to 656.4p.