The BAE Systems defence group, which has its headquarters in Farnborough, has reported a 10% fall in first-half sales as the US and UK markets remain “constrained”.

In the six months to 30 June, the Hampshire-based group recorded revenues of £7.61 billion, down from £8.49 billion for the same period a year earlier.

Profit before tax rose, however, from £531 million to £541 million, helped by a high level of activity in international markets, particularly Saudi Arabia.

Last year, the group announced that it had to close its shipbuilding operations at Portsmouth and cut jobs in Glasgow, resulting in more than 1,700 redundancies, but it said its UK operations are now “stable” following the restructuring.

Chief executive Ian King said: “Operationally, the group continues to perform well, benefiting from good programme performance on its large order backlog of almost £40 billion. Sales are anticipated to be weighted towards the second half of 2014, including the timing of Typhoon aircraft deliveries.

“We are finalising a further £1.3 billion of international orders and are at an advanced stage of negotiations on a further £1 billion of UK sole-source naval contracts. Excluding the impact of exchange translation, the group remains on track to deliver earnings in line with our expectations for the full year.”