BAE battles with lower activity

4th May 2011 09:28

Defence giant BAE Systems has said that trading in 2011 so far has been "consistent with management expectations", but it does expect sales to be lower than 2010."The group continues to anticipate a reduction in sales in 2011 as the volume adjustment in Land & Armaments [its armoured vehicles and artillery systems division] is expected to complete and as the changes arising from the Strategic Defence and Security Review (SDSR) reduce activity in the UK businesses," the group said.The SDSR - announced in October 2010 - included a number of budget cuts and personnel reductions across the Ministry of Defence.To battle the lower activity, the group said it has taken continuing actions to lower cost and improve efficiency to mitigate the impact, which are expected to benefit return on sales.The 2011 performance is expected to be weighted to the second half of the year, according to BAE.In addition, the group said that the delayed approval of the US 2011 budget - and the resulting period of 'Continuing Resolution' - is not anticipated to have a material impact on full year results.---BC