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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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
