BAE Systems, the FTSE 100 defence contractor, saw headline sales fall by 14% in the 12 months ended December 31st and said that "little sales growth" is expected for 2012 in the current market conditions.
Shares tumbled over 4% to 319.17p in early trading on Thursday.
Sales fell from £22,275m last year to £19,154m in 2011 due to a number of factors, including the lower level of Bradley reset/remanufacturing activity and completed Family of Medium Tactical Vehicles (FMTV) programme in the Land & Armaments business, as well as the impact of the UK government's spending review.
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BAE also experienced a delay in securing some of the contract changes to the Saudi Typhoon programme.
"BAE Systems is operating in a difficult business environment as defence spending reduces in its largest markets, the US and UK. These market pressures have been apparent for some time," the firm said.
Pre-tax profit edged higher to £1,493m from £1,453m, while basic earnings per share (from continuing operations) increased from 27.9p to 37p.
The total dividend was raised by 7.4% to 18.8p. Operating business cash flow fell from £1,187m to £634m while net debt surged from £242m to £1,438m.
BC
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