BAE Systems yesterday shrugged off the impact of corruption allegations, posting sharp increases in first-half sales and earnings, boosted by its US business.
Europe's biggest arms manufacturer faces several bribery investigations, including one by the US department of justice (DoJ), which announced in June an investigation into whether its 20-year-old Al-Yamamah arms deal with Saudi Arabia broke anti- corruption laws.
Mike Turner, chief executive of the UK-based company, said the DoJ investigation "has not affected our business in the US in any way". It denies any wrongdoing.
In December, the UK serious fraud office controversially dropped its investigation into the same deal. BAE said it would co-operate with the DoJ investigation and a continuing investigation by the serious fraud office "to the fullest extent possible".
Yesterday, the group said the ground-based conflicts in Iraq and Afghanistan had boosted demand for armoured vehicles and other equipment that protect forces from attacks including roadside bombs.
Sales at the company's land and armaments division rose 43 per cent to £1.2 billion ($2.4 billion). The July 31st takeover of Armor Holdings, a US maker of armoured cars and body protection, is expected further to entrench BAE in that business.
Analysts said the good performance was reflected across the company, with BAE outperforming its rivals in the US. The once-troubled UK businesses had benefited from improved relations with the British government and, according to one analyst, were now putting in a "world class" performance.
Mr Turner said BAE would be seeking further acquisitions. "We are looking very carefully in our six home markets," he said. BAE has manufacturing plants in six countries - the UK, US, South Africa, Australia, Sweden and Saudi Arabia.
George Rose, finance director, said that, although it had paid £2.2 billion for Armor, "that still leaves us with a strong balance sheet and substantial capacity for future acquisitions".
Operating profit for the half rose 19 per cent to £643m, while sales were up 8 per cent at £6.89 billion. The company boosted its interim divided from 4.4p to 5p a share. BAE shares ended 1 per cent higher at 440.25p, as the overall market fell.
