BAE predicts ‘significant disruptions’ from Covid-19
Defence firm BAE Systems today said it expects “significant disruptions” due to coronavirus as it moves into the second quarter of the financial year.
It comes after an opening three months where the Covid-19 pandemic had a minimal impact on the London-listed company.
The firm today said it was assessing the situation and would update shareholders on whether to expect a dividend in July when it releases half-year results.
BAE also said it would decide on how much to pay its directors at that point.
“We continue to assess the impact on our business of the measures announced by national governments, together with the actions the Group has taken to support customers and suppliers,” the company said.
“In parallel, cost control measures have been implemented to help limit the financial impact of disruptions to the business.”
The announcement came as many London-listed companies have cut pay for their top management and boards for the duration of the crisis.
Primark owner ABF today sanctioned a 50 per cent pay cut for the retail chain’s top directors. And ITV directors volunteered to take a 20 per cent pay cut, while their bonuses were scrapped.
BAE added it had recently won contracts to build self-propelled howitzers and a missile-defence system, and repair US ships.
Proposed acquisitions of the Collins Aerospace Military Global Positioning System business and Raytheon’s Airborne Tactical Radios business are also expected to go ahead in the coming months, the firm said.
It said the company’s annual shareholder meeting will not be held in person, since gatherings of more than two people have been banned.
Instead, shareholders will vote online and in the post.
BAE said: “Whilst the Covid-19 pandemic will impact our previous guidance for 2020, at this stage it is not possible to predict either the duration of the disruption or its impact on the 2020 outturn.
“A further update will be provided when appropriate.”
Meanwhile, the firm is continuing to provide essential parts for ventilators as part of the UK’s ventilator challenge consortium.
The consortium is aiming to produce thousands of ventilators for the NHS at full speed.