UK defence company BAE Systems (BA.) has delayed a decision on its dividend and flagged ‘significant disruptions’ in the second quarter to business from the coronavirus pandemic.
But the company is pushing on with its proposed acquisitions of the Collins Aerospace Military Global Positioning System business and Raytheon’s Airborne Tactical Radios business in the coming months.
The defence contractor’s share price dipped 2.6% on Friday to 485.2p, valuing the business at £15.6bn.
DISRUPTION AND LIQUIDITY
As the second quarter got going, BAE said it had seen more of the significant disruption that began in March, but added that its liquidity positions were strong.
‘We have mobilised our business continuity plans in response to the COVID-19 outbreak with governance and communication structures to facilitate rapid decision-making,’ the company said.
The company went on to add that it has ‘significant gross cash’ and access to a £2bn revolving credit facility committed to April 2024, along with other short and long-term debt options, news that should reassure investors.
‘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,’ BAE said.
