BAE reaps Airbus dividend

An increasingly bold transatlantic strategy, a strong performance in its large-scale military programmes for the MoD and growing returns from its share in Airbus helped

deliver robust half-year profits.

While the UK’s biggest defence company strengthened its position in the US, its European growth was boosted by a good showing by Airbus, in which BAE Systems owns a 20 per cent stake.

The civil aircraft manufacturer was responsible for £176m in underlying profits for BAE, on revenues up 16 per cent to £1.5bn.

Airbus secured net new orders for 276 aircraft, including a further 10 firm orders for the A380, representing a 39 per cent market share of total order units placed in the first half of 2005.

Chief executive Mike Turner used the group’s interim results to dismiss any suggestion that the company would be selling its stake in Airbus any time soon.

BAE’s Airbus holding is worth an estimated £2.5bn, and speculation has been rife that it planned to dispose of it — most likely to EADS, which owns the remaining 80 per cent and has first refusal on any disposal by its UK partner.