BAE Systems’ Share Price Fell 2.5% Despite Upbeat 2023 Results

The BAE Systems plc (LON: BA) share price fell 2.49% after releasing its preliminary results for the year ended 31 December 2023. The defence contractor noted that it ended 2023 on a solid financial footing, having generated £2.6 billion in free cash flow, inclusive of £3.8 billion net cash from operating activities, culminating in a cash reserve of £4.1 billion and a net debt of £1.0 billion. 

The robust financial position supported the company's ability to finance the acquisition of Ball Aerospace, which was finalised in February 2024. A record-breaking order backlog of £69.8 billion was achieved, fueled by £37.7 billion in new orders, thanks to significant contracts awarded throughout the year, including SSN-AUKUS, Dreadnought, and multiple orders for combat vehicles in the Hägglunds division.

The Board has proposed a final dividend of 18.5p per share, raising the 2023 dividend to 30.0p, marking an 11.1% increase from the previous year. This dividend payout is pending shareholder approval at the 2024 Annual General Meeting and is scheduled for payment on 3 June 2024 to shareholders registered as of 19 April 2024.

The acquisition of Ball Aerospace from Ball Corporation for $5.5 billion (£4.4 billion) was concluded in February 2024, with the Group financing the deal through a mix of bridge financing and existing cash reserves.

Throughout the year, the Company bought back 59 million shares for £561 million as part of the 2022 share buyback program, with 142 million shares repurchased at £1.2 billion, reducing the share capital by 4.4%.

A new buyback program worth up to £1.5 billion was sanctioned in August, slated to start following the current program's conclusion, with a three-year completion target.

Charles Woodburn, BAE Systems Chief Executive, said: “We've delivered a strong operational and financial performance in 2023, and I'm extremely proud of the way our people have delivered cutting-edge equipment and services to our customers, working together with partners across our supply chain. Our performance, combined with our global footprint and record order intake, means we're well-positioned for sustained growth in the coming years. We'll keep driving the business forward, investing in new technologies, facilities and our people.

BAE Systems share price. 

The BAE Systems share price fell 2.49% to trade at 1223.50p from Tuesday’s closing price of 1254.75p.