Commenting on BAE Systems’ (www.baesystems.com) first-half-year results, chief executive Charles Woodburn said: “We have made good progress in the first half, strengthening the outlook through significant wins on the Australian SEA 5000 and US Amphibious Combat Vehicle programmes.

"These, combined with the launch of the UK Combat Air Strategy, provide good momentum into the second half and beyond.

“Operationally, there have been some notably strong performances in our Electronic Systems and Air sectors, but also some disappointments on certain long-standing programmes in Maritime and Platforms and Services in the USA, where we have now taken steps to strengthen management and improve programme execution . . . with a large order book and a positive outlook for defence budgets in a number of key markets, we have a strong foundation to deliver growth and sustainable cash-flow.”

The order backlog increased to £39.7 billion, with £9.7 billion of orders taken in the first half (the order backlog does not yet include the initial contract on the SEA 5000 programme, or the contract for the supply of Typhoon and Hawk aircraft to Qatar, both of which are expected in the second half of the year).

At £8.8 billion, sales are down 3% on a constant-currency basis, as a result of reduced Typhoon production activity; at £874 million, underlying EBITA is down 6% on a constant-currency basis.