BAE Systems Upgrades Full Year Guidance Following Strong Half-Year Performance

The Tip Desk · July 30, 2026 · 1 min read

The defense contractor reported a record £84.0bn order backlog and a 13% increase in underlying EPS for the period ending June 30, 2026.

BAE Systems plc has upgraded its full-year guidance following a period of strong operational and financial performance. The company reported that sales increased by 9% on a constant currency basis, with all sectors contributing to growth [1, 8]. Underlying EBIT rose 11% to £1,701m, increasing the Group's return on sales to 10.8% from 10.6% in 2025 [1, 13]. Underlying EPS increased 13% to 38.9p [1, 8].

Order intake for the period was £16.4bn, and the company closed the half-year with a record order backlog of £84.0bn [1, 8]. Key contributions included a c.£2.5bn contract for Türkiye's Typhoon aircraft and significant awards for the Space & Mission Systems (SMS) business. The SMS business specifically saw constant currency sales growth of 29% [11, 13].

Free cash flow was an inflow of £1,791m, a significant shift from the £368m outflow in the comparative period [11, 16]. This result was driven by material net cash advances from customers totaling £1.6bn, including MBDA.

Chief Executive Charles Woodburn stated that the company is investing in innovation and capacity, citing new collaborative combat aircraft and facility investments in Texas and New Hampshire to support the US Government's goal to quadruple production of critical munitions. Management noted that governments are responding to a volatile global threat picture with sustained increases in defense budgets [1, 10].