BAE Systems has maintained its full-year guidance after announcing that its trading in the year-to-date has remained in line with expectations.

The defence giant is expecting sales growth of between 7-9% on top of the £28.3bn it reported in 2024.

BAE said in a market update that its operational performance had continued to be strong and that its order backlog was providing “good visibility” and supporting long-term growth.

The group also said it was “actively engaged” with the UK Government to make recommendations on the nation’s future defence plan in the coming months. The Government currently has a commitment to increase defence spending to 2.5% of GDP from 2027.

“We’ve had a strong start to 2025 and are maintaining our guidance for the full year,” said BAE’s chief executive, Charles Woodburn.

“During this time where the defence and security landscape is rapidly evolving, we are focused on delivering our long-term programme commitments to our customers, while investing in our business to boost capacity, drive efficiencies and shape our portfolio to support future growth.”

BAE also outlined plans for its R&D investment for the 2025 financial year, building on more than £1bn of capital expenditure in 2024, as part of an aim to “increase future capacity” and “modernise” its systems.

These plans include a new explosives filling facility in South Wales, a new ship build assembly hall in Glasgow and a modern ship lift and land-level repair complex in Florida, all of which are expected to become operational in the summer.

BAE also plans to recruit more than 2,400 new employees into apprentice, undergraduate and graduate roles this year.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, commented that while BAE is based in the UK, around half of its sales come from the US, making this the group’s most important region.

“The vast majority of equipment that BAE delivers to its US customers is already produced in-country, with a domestic supply chain, meaning that BAE shouldn’t be too affected by US tariffs as they currently stand,” Chiekrie added.

“Back on home soil, the UK Government has reaffirmed its target to increase defence spending to 2.5% of GDP from 2027. With a number of other NATO members committing to significant increases in their defence budgets too, BAE looks well-positioned to meet this rising demand over the coming years.”

BAE Systems will announce its H1 results for the six-month period to 30 June on 30 July.

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