-         Sales increased 11%² in the period, with all sectors contributing growth. Organic growth was 9%².

-         Underlying EBIT was up 13%², increasing the Group's return on sales for the period to 10.6%. Organic growth was 10%².

-         Underlying EPS increased 12%² to 34.7p, after accounting for the Group's underlying net finance costs and tax.

-         Free cash outflow of £368m is inclusive of movements on customer advances and is in line with expectations.

-         Order intake of £13.2bn remained high across all sectors and we closed the period with an order backlog of £75.4bn.

-         The reported growth in revenue of 9%² reflects the same strong operational performance across the portfolio but excludes the impact of our equity accounted investments.

-         Operating profit increased 2%² as the growth in underlying EBIT was offset by additional costs from the amortisation of acquired intangibles, reflecting the significant acquisitions in the prior year which included Ball Aerospace. The prior year also included a one-off profit on the disposal of our partial interest in Air Astana of £75m.

-         Basic EPS was up 3%² to 32.3p, after accounting for net finance costs and tax.

-         Net cash flow from operating activities is also inclusive of movements in customer advances in the period, as well as timing of other working capital requirements.

 

1.         We monitor the underlying financial performance of the Group using alternative performance measures (APMs). These measures are not defined in International Financial Reporting Standards (IFRS) and therefore are considered to be non-GAAP (Generally Accepted Accounting Principles) measures. The relevant IFRS measures are presented where appropriate. The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

2.         Growth rates for sales, underlying EBIT and underlying EPS are on a constant currency basis (i.e. calculated by translating the results from entities in functional currencies other than pounds sterling for the period ended 30 June 2024 to pounds sterling at the average exchange rate of such currencies for the period ended 30 June 2025). The comparatives have not been restated. All other growth rates and year-on-year movements are on a reported currency basis.

-         We laid the keel of HMS Dreadnought, the first of four Dreadnought Class submarines we are constructing for the Royal Navy, at our Barrow-in-Furness shipyard in the UK.

-         Concept and assessment work on the Global Combat Air Programme (GCAP) continues with our international partners and we received a further £1.0bn of funding on the UK assessment phase contract in the first half of the year.

-         We launched Edgewing, a joint venture with our international industry partners in Italy and Japan on GCAP, which will be accountable for the design and development of the next generation combat aircraft under the programme.

-         We secured a $1.2bn (£0.9bn) contract to provide the US Space Force with space-based missile tracking capabilities as the prime contractor to design and build a constellation of satellites.

-         Our Armored Multi-Purpose Vehicle (AMPV) celebrated its 500^th delivery milestone and is on track, in full-rate production, to meet the US Army's plan to field nearly 3,000 AMPVs in its Armored Brigade Combat Team formations.

-         We played a critical role in preparing Royal Navy ships for the UK Carrier Strike Group 2025 and the Royal Navy selected our all-electric Malloy T-150 uncrewed air systems (UAS) to transport vital supplies between the ships for the first time during its ongoing deployment to the Indo-Pacific.

-         Her Royal Highness The Princess of Wales officially named HMS Glasgow, the first of eight Type 26 frigates we are building for the Royal Navy, at a ceremony in Glasgow, UK. Work continues on HMS Glasgow's sister ships - HMS Cardiff moved to our Scotstoun yard last year to begin outfitting whilst HMS Belfast, HMS Birmingham and HMS Sheffield are progressing at our Govan site.

-         We opened a new shiplift and land-level repair complex at our Jacksonville, Florida, shipyard. The $250m (£190m) investment significantly enhances the capabilities of the complex and increases capacity on the site to maintain and repair US Navy vessels and commercial ships.

-         We officially opened the Janet Harvey Hall at our ship build site in Glasgow, UK. The hall has capacity for two Type 26 frigates to be constructed side-by-side, with HMS Belfast and HMS Birmingham currently under construction in the hall.

-         Her Royal Highness The Princess Royal officially opened our Applied Shipbuilding Academy in Glasgow, UK. The £12m facility comprises a multi-purpose flexible learning hub and provides a high quality, hands-on training environment.

-         Secretary of State for Defence, John Healey, opened our new £25m artillery factory in Sheffield, which is the first to restore critical gun barrel manufacturing capability in the UK and is on track to be operational before the end of the year.

-         We have invested more than £8m to develop innovative new approaches in the production of energetics and propellants, which will support the ramp up of our critical munitions production and strengthen supply chain resilience for the UK and its allies.

-         We made good progress against our target to recruit 2,400 graduates and apprentices in the UK this year. In South Australia, we welcomed our largest ever cohort of apprentices, which is part of a wider intake of more than 250 graduates, apprentices and interns in 2025.

-         The strength and outlook for the Group, alongside our disciplined capital allocation, means that, after investing in our people, technologies and capital expenditure, we have continued to make significant returns to shareholders. In the first six months of the year, we returned £849m to shareholders, a 5% increase compared to the £812m returned in the first half of 2024. This reflected paying £622m in respect of the 20.6p 2024 final dividend (2024 £562m in respect of the 18.5p 2023 final dividend) and repurchasing 15,038,662 (2024 19,403,928) ordinary shares at a total cost of £227m including transaction costs (2024 £250m) under our ongoing buyback programme.

-         In addition, the Board has declared an interim dividend of 13.5p in respect of the first six months of the year, which will be paid 
on 3 December 2025.

-         Underlying net finance costs c.£400m

-         Effective tax rate c.20%

-         Non-controlling interests c.£90m

1.         Whilst the Group is subject to geopolitical and other uncertainties, the Group guidance is provided on current expected operational performance. The guidance is based on the measures used to monitor the underlying financial performance of the Group. Reconciliations from these measures to the financial performance measures defined in IFRS are provided in the Alternative performance measures section on page 38.

1.         As at 30 June 2025 and including share of equity accounted investments.

-         delivered increased sales and underlying EBIT compared to the first half of 2024;

-         secured £13.2bn of orders;

-         delivered mission critical capabilities to our customers;

-         sustained strong operational performance;

-         enhanced our product portfolio by integrating the advanced technologies and capabilities acquired through M&A activities in 2024; and

-         increased our self-funded R&D and continued investment in capital expenditure at high levels.

1.        We provide customers with world-class defence products and capabilities across multiple markets.

2.        We undertake multi-decade programmes with long-term embedded value. Our contract order backlog provides a high level of sales visibility, driven by multi-year programmes.

3.        We have a growing global opportunity pipeline. Our diverse geographic footprint supports us in pursuing excellent opportunities across all sectors as countries around the world face up to the multi-faceted threat environment.

4.        We foster a high-performance, innovative culture and consistently invest in R&D to build on existing world-leading capabilities and generate new innovative and disruptive technologies.

5.        We have an intense focus on operational excellence, with strong, consistent programme performance. We focus on creating value for our investors and customers.

6.        Sustainability is embedded in our business - it forms part of our strategic framework and underpins our purpose.

7.        We operate a value-compounding operating model, undertaking our core business activities with a clear, consistent and careful capital allocation.

Return on Sales/Revenue

10.6 %

10.4 %

9.8 %

10.4 %

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

2.         On a Group basis, £42m (2024 £40m) of profit for the period is attributable to non-controlling interests, with £1,041m (2024 £948m) attributable to equity shareholders. On an IFRS basis, £42m (2024 £40m) of profit for the period is attributable to non-controlling interests, with £969m (2024 £948m) attributable to equity shareholders.

3.         Calculated by translating the results from entities in functional currencies other than pounds sterling for the period ended 30 June 2024 to pounds sterling at the average exchange rate of such currencies for the period ended 30 June 2025. The comparatives have not been restated.

-         In Electronic Systems, the £3.8bn of order intake included significant orders in the Electronic Combat business, together with the missile warning and tracking system award to our space business in the US, a capability essential for the Golden Dome project.

-         In Platforms & Services, the £2.4bn of order intake featured strong European contract awards in Bofors, as well as continued orders for our US combat vehicle programmes.

-         Our Air sector recorded £3.8bn of order intake for the period including £1.4bn in MBDA, showing continued European growth, and a further £1.0bn of funding for the UK assessment phase of the sixth generation combat aircraft.

-         The Maritime sector landed £2.0bn of orders for the next major phase of Canada's River Class destroyer programme, Australia's Hobart Class combat system upgrade and increased orders for the Royal Navy in our Submarines business.

-         Cyber and Intelligence contributed £1.4bn in new orders across the half year.

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

2.         Including share of equity accounted investments.

3.         Order book represents the transaction price allocated to unsatisfied and partially satisfied performance obligations as defined by IFRS 15 Revenue from Contracts with Customers.

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

 

As derived from IFRS
Six months ended 30 June 2025	Revenue	Operating profit/(loss)	Return on revenue	Net cash flow from operating activities		Order book
	£m	£m	%	£m		£bn
Electronic Systems	3,592	357	9.9 %	374		8.1
Platforms & Services	2,470	292	11.8 %	(146)		13.3
Air	3,470	487	14.0 %	37		14.5
Maritime	3,132	218	7.0 %	(8)		20.8
Cyber & Intelligence	1,186	78	6.6 %	12		1.4
HQ3	19	(105)	-	(61)		-
Deduct: Intra-group	(298)	-	-	-		(1.1)
Deduct: Tax4	-	-	-	(134)		-
Total	13,571	1,327	9.8 %	74		57.0

1.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

2.         At a Group level, the key cash flow metric is free cash flow (see the Alternative performance measures section on page 38). In the six month period to 30 June 2025, free cash flow was an outflow of £368m (2024 inflow of £219m).

3.         HQ comprises the Group's head office activities, together with a 17% interest in Air Astana.

4.         Tax is managed on a Group-wide basis.

1.         Including share of equity accounted investments.

2.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         We celebrated the successful launch of NASA's Spectro-Photometer for the History of the Universe, Epoch of Reionization and Ices Explorer (SPHEREx) Observatory, equipped with the BAE Systems built spacecraft bus, telescope and RAD750® single board computer and prepared 
by our leading observatory integration and environmental testing.

-         We introduced our new Elevation^TM spacecraft product line designed for multi-launch or rideshare missions, featuring common system components and defined configurations for enhanced affordability and rapid deployment.

-         The US Space Force formally operationally accepted the Weather System Follow-on-Microwave (WSF-M) satellite. As the mission prime, 
we built the spacecraft bus and microwave imager. We continue to perform mission operations to support WSF-M's critical space-based, 
time-sensitive data to enhance the safety and success of military mission planning and operations around the globe.

-         Under the Future Operationally Resilient Ground Evolution Command and Control contract, worth $151m (£116m), we are developing 
a next-generation ground system for US Space Force missile-warning satellites.

-         We are building the spacecraft bus for National Oceanic and Atmospheric Administration's (NOAA) upcoming Space Weather Next L1 Series mission under a $230m (£177m) contract to continue providing valuable data to NOAA's Space Weather Prediction Center.

-         We are under contract to deliver 13 Network Tactical Common Data Link production systems to support US Navy requirements for real-time intelligence, surveillance, reconnaissance and command and control and have begun deliveries.

-         Our Controls & Avionics team remains focused on supporting Boeing's aircraft deliveries and is progressing the development of the integrated flight control electronics and remote electronic units for the new Boeing 777X aircraft, with the flight control system performing as expected during flight-testing.

-         Our EA-37B programme team is executing contracts, including international support, valued at more than $1.3bn (£1.0bn). We are focused 
on cross-decking the prime mission equipment as part of Baseline 3 and have delivered five aircraft for formal testing and training, while continuing to sustain the EC-130H. Future baselines are in development to continually evolve the electromagnetic attack capability for the 
US Air Force.

-         The Eagle Passive Active Warning Survivability System (EPAWSS) was successfully fielded in the first quarter of 2025, with two F-15Es delivered to RAF Lakenheath in the UK, and we are under contract through full-rate production (FRP) Lot 5.

-         The F-35 Lightning II programme is on track to deliver around 200 electronic warfare suites to Lockheed Martin in 2025, including 70 of the new Block 4 configuration.

-         Production continues on the APKWS® laser-guidance kit programme under an Indefinite Delivery, Indefinite Quantity contract. We continue to demonstrate counter-UAS capability, recently in conjunction with the Group's Malloy platforms.

-         Our SMS team was awarded a $1.2bn (£0.9bn) US Space Systems Command contract for the Resilient Missile Warning & Tracking - Medium Earth Orbit Epoch 2 (RMWT-MEO E2) programme to build the next-generation RMWT satellite system for the Department of Defense. As the prime contractor for the mission, we will develop and integrate multiple satellite buses and payloads, as well as be responsible for ground command and control and mission operations.

-         Our Navigation & Sensor Systems team continues development on the next generation M-code technologies under the Space Force Miniature Serial Interface Increment 2 programme.

-         We secured a low-rate initial production contract worth $41m (£32m) from the US Navy's Naval Air Systems Command for the production of three units of the Advanced Survivability Pod for the P-8 Poseidon aircraft.

-         The Air Force Research Laboratory awarded the Force Optimization through Rapid-prototyping, Gear Enhancements & Innovative Technology (FORGE-IT) contract worth $34m (£26m) to continue development and deployment of the Battlefield Assisted Trauma Distributed Operations Kit (BATDOK). Together, BATDOK and FORGE-IT will improve and modernise service members' capabilities to provide medical care on the battlefield and during transition to other facilities.

-         We are taking a leadership position in the emerging market for energy storage and power management solutions to support more-electric and hybrid-electric aircraft and announced a state-of-the-art facility expansion in Endicott, New York, to enhance energy storage systems production, engineering and manufacturing capacity for aircraft electrification.

-         Our Electronic Systems sector remains positioned for growth in the medium term. We maintain a diverse portfolio of defence and commercial products and capabilities for US and international customers. We expect to benefit from applying innovative technology solutions to defence customers' existing and changing requirements, building on our significant roles on F-35 Lightning II, F-15 upgrades, EA-37B, M-Code GPS upgrades and classified programmes, as well as a number of precision weapon products.

-         Over the long term, we are poised to build on our technology strengths in emerging areas of demand, including precision weaponry, space resilience, hyper-velocity projectiles, autonomous platforms and the development of multi-domain capabilities.

-         In our commercial portfolio, we continue to leverage our electric drive power capabilities to address growing demand for low- and zero-emission solutions across an increasing number of civil platforms, with opportunities to migrate these technologies to defence applications.

-         In SMS, we continue to drive future growth by leveraging synergies across sectors and identifying areas where our businesses can partner 
to pursue and capture new and adjacent revenue opportunities for the US Intelligence Community, Department of Defense and civilian 
space agencies.

1.         Including share of equity accounted investments.

2.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         Our AMPV celebrated its 500^th delivery milestone and is on track, in full-rate production, to meet the US Army's plan to field nearly 3,000 AMPVs in its Armored Brigade Combat Team formations.

-         Our Hägglunds business is further expanding its production capacity with a new production hall and test and verification facilities, while also securing production partnerships in customer nations to accommodate the significant vehicle orders received.

-         Our Ordnance Systems Inc. business is in the final stages of completing a new nitrocellulose facility in Radford, Virginia, which will provide significantly enhanced capacity, quality and levels of automation to reduce risk in the process.

-         Our Combat Mission Systems has entered into an agreement with Wojskowe Zakłady Motoryzacyjne S.A. to support the Polish Land Forces' M88 Armored Recovery Vehicle fleet operational readiness.

-         At our Jacksonville, Florida, shipyard we continued fabrication work under an order from a prime US contractor in relation to Virginia- and Columbia-class submarines. In June, the shipyard also commenced operations of its $250m (£190m) shiplift and land-level repair facility. This investment has increased the shipyard's repair capacity by 300%.

-         Our UK Weapon Systems business was awarded a contract worth over $81m (£62m) by the UK Ministry of Defence to deliver 150 artillery barrels. The team was also awarded a $162m (£125m) contract from the US Army for new M777 structures, the first of which will be produced at our new multi-million-pound artillery development and production facility in Sheffield, UK, as well as within the US supply chain.

-         We received a $357m (£275m) order to procure long-lead material for additional AMPVs for the US Army, continuing the programme's full-rate production. The business also received a $214m (£165m) award for the US Army's M109A7 Paladin Self-Propelled Howitzer programme.

-         Our Combat Mission Systems business was awarded a $70m (£54m) contract from General Dynamics for the production of Virginia Payload Module missile tubes for Block VI Virginia-class submarines.

-         The Swedish Government announced a support package worth nearly $300m (£231m) in total, including 18 ARCHERs, further TRIDON Mk2 Ground Based Air Defence systems and additional medium calibre ammunition.

-         The US Marine Corps placed two orders for Amphibious Combat Vehicles (ACVs) totalling more than $360m (£277m) for full-rate production of 60 ACV-30mm vehicles, which includes fielding support, spares and test equipment. The contract includes a series of options to produce up to 150 vehicles.

-         In May, our Ship Repair business secured a nearly $109m (£84m) contract from the US Navy for the dry-docking maintenance of the guided missile destroyer, USS The Sullivans, with work scheduled to begin in the second half of the year.

-         We continue to shape our business to deliver on increased demand from US and international customers for production and sustainment of combat vehicles and artillery systems. We have seen renewed interest in the M777 artillery capability. We are also maintaining our position as a key supplier of US Army combat vehicles through our AMPV, M109A7 and M88 franchises. In addition, following the performance of Bradley Fighting Vehicles in Ukraine, we are working with the US Army to develop the most advanced Bradley configurations to date, the M2A4 and the M2A4E1, which both feature enhanced defence capabilities. We are seeing increased international interest in these products.

-         Across our Swedish businesses, we continue to build a growing pipeline of business opportunities for the CV90, BvS10 and Beowulf from our Hägglunds business, as well as for artillery, naval and air defence systems and munitions from our Bofors business.

-         We are maintaining our strong positions on naval guns, missile launch and submarine programmes, as well as US Navy ship repair and modernisation activities where the business has invested in infrastructure and facilities in key home ports.

1.         Including share of equity accounted investments.

2.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         In the Kingdom of Saudi Arabia, we continued to deliver services under the five-year Saudi British Defence Co-operation and Salam programmes, including our support to the Royal Saudi Air Force's Tornado and Typhoon fleets and the Royal Saudi Naval Force's Hunter mine warfare vessels.

-         Activity on our Qatar Typhoon and Hawk programmes continues, with 22 of the 24 Typhoon aircraft in service to date with the Qatar 
Emiri Air Force.

-         We continue to deliver Typhoon major units in support of core European customer orders, with five delivered in the first half of the year.

-         We continue to progress construction of the UK's Flying Combat Air Demonstrator, which will test next-generation skills, tools, processes and techniques needed to underpin GCAP and the entry into service of the core aircraft platform, which will be called Tempest in the UK, by 2035. In July, alongside our industry partners and the Ministry of Defence, we revealed the design as the aircraft reached a major milestone, with two thirds of its structural weight now in manufacturing.

-         Our US Programmes business completed 74 F-35 aft fuselages in the first half of the year. The current Production Lots 18/19 support the continuation of production deliveries at Samlesbury, UK, through to Q1 2027. Negotiations are ongoing with Lockheed Martin for Lots 20-22 which will continue production to 2030.

-         The Royal Navy selected our all-electric Malloy T-150 UAS to transport vital supplies between UK Carrier Strike Group ships for the first time during its ongoing deployment to the Indo-Pacific this year.

-         We launched Edgewing, a joint venture with our international partners, Leonardo (Italy) and Japan Aircraft Industrial Enhancement Co. Ltd. (Japan), on GCAP. The new company, based in Reading, UK, will be accountable for the design and development of the next generation combat aircraft and will remain the design authority for the life of the product, which is expected to go out beyond 2070.

-         Concept and assessment work on GCAP continues with our international industry partners in all three nations under their respective national contracts. We received a further £1.0bn of funding on the UK assessment phase contract in the first half of the year.

-         We secured a further £97m of funding for the phase 4 enhancements programme to continue the development of Typhoon capability. In addition, we achieved £205m of funding in support of the mobilisation of the Radar Mk2 production contract.

-         In July, the Republic of Türkiye and the UK Government signed a Memorandum of Understanding relating to the potential purchase of Typhoon aircraft and we are working closely with the two governments to formalise an agreement for procurement of the aircraft and associated supplies.

-         MBDA has continued to secure significant orders in the first half of 2025. Orders received include: French Air Force, Italian Air Force and Army and UK Royal Navy further production orders for ASTER 15 & 30 Block 1 missile; Indian Navy Rafale weapon package order for the Meteor Beyond Visual Range Air-to-Air Missile (BVRAAM), MICA, SCALP and Exocet AM39; and, a South Korean production order for the Meteor BVRAAM which will enable the Air Force to benefit from a common stockpile for both KF-21 and F-35.

 

-         GCAP is a strategically important partnership that will not only drive innovation and technological advancement but also promote significant economic activity in the UK, Japan and Italy, with the aim of securing the future of their respective combat air industries for decades.

-         We will continue to focus on ensuring that deliveries of Typhoon aircraft and support are made in line with customer expectations. Future Typhoon production and support sales are underpinned by existing contracts. We continue to pursue future sales of Typhoon in Europe and the Middle East.

-         We expect production of the rear fuselage assemblies for the F-35 to be sustained at current levels of approximately 150 aft fuselages. We continue to play a significant role in the F-35 sustainment programme in support of Lockheed Martin.

-         In the Kingdom of Saudi Arabia, the In-Kingdom Industrial Participation programme continues to make good progress consistent with our long-term strategy, while supporting the Kingdom's National Transformation Plan and Vision 2030.

-         We expect our Saudi in-Kingdom support business to remain stable, underpinned by long-standing contracts, while we continue to address the Kingdom's current and future combat air requirements.

-         Our FalconWorks® organisation will continue to pursue internal and external investment opportunities which enhance our capabilities and technologies.

-         MBDA is well placed to benefit from increased defence spending in Europe and internationally. The business has a strong order backlog and development programmes continue to enhance the long-term capabilities of the business in air, land and sea domains.

1.         Including share of equity accounted investments.

2.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         The sixth Astute Class submarine, Agamemnon, is in its in-water phase, whilst we continue construction on the final vessel in the class.

-         We continue to make progress on the four Dreadnought Class submarines, with advancing levels of construction underway on the first three submarines in the class, at our site in Barrow-in-Furness, UK.

-         The Devonshire Dock Hall at Barrow-in-Furness, UK, has been working at full operational capacity during the period, following the fire in 2024.

-         In the UK, the Type 26 frigate programme of eight ships is progressing. Investment continues both internally and through the supply chain to support delivery, with the transition from design to production an ongoing area of focus. We have five ships in build during 2025; HMS Glasgow and HMS Cardiff have both entered the water and are progressing through final outfit at our Scotstoun shipyard, with HMS Glasgow undergoing system testing and commissioning. Unit construction and block integration of HMS Belfast, HMS Birmingham and HMS Sheffield continues at our Govan shipyard.

-         In Australia, construction of the Hunter Class frigate is progressing with 32 of the 78 units of the first ship in production.

-         Alongside this, the final Anzac Class frigate, HMAS Parramatta, was returned to water at the Henderson shipyard, with completion of the upgrade programme expected before the end of the year.

-         The upgrade programme for the Royal Australian Air Force's Hawk Aircraft is approaching finalisation with installation of 28 of the 33 engines completed.

-         Our specialist teams have played a critical role in the national endeavour to generate, support and sustain the Portsmouth-based ships which deployed as part of the UK's Carrier Strike Group 2025.

-         Our investment in munitions continues at pace, including a new explosive filling facility at Glascoed, UK, enabling a sixteen-fold increase in production capacity of 155mm artillery shells.

-         In RBSL, the Challenger 3 programme has delivered a total of four prototype tanks, with another four in build, marking significant progress. The Boxer programme is expected to move to full-rate production in 2025. To date, a total of five UK-built vehicles have been delivered and are currently undergoing planned reliability trials.

-         It was announced that the Canadian Government will be working with Australia to establish an Arctic Over The Horizon Radar (A-OTHR) capability. As the enterprise partner for Australia's over the horizon radar system, JORN, we will support the government in this important agreement.

-         We secured an order of £284m for the Combat System upgrade of the first of the three Hobart Class Air Warfare Destroyers.

-         Following the cancellation of the TransCAP element of the Anzac Class frigate upgrade programme, we have continued to work with the Commonwealth of Australia to determine the appropriate use of our Henderson facility in Western Australia.

-         The initial mobilisation phase of the SSN-AUKUS programme in Australia has commenced to support the delivery of the SSN-AUKUS fleet of conventionally armed, nuclear-powered submarines for the Royal Australian Navy.

-         We signed a contract with Canada's Irving Shipbuilding Inc., marking the start of the next major phase on the River Class destroyer programme. The ship is based on the Type 26 platform with specified design changes to meet the Royal Canadian Navy's requirements. Under this new contract, we will provide support and consultancy services throughout the build phase.

-         The formal naming of HMS Glasgow by her Sponsor, Her Royal Highness The Princess of Wales, took place in May.

-         In the UK, Her Royal Highness The Princess Royal officially opened our Applied Shipbuilding Academy in Glasgow and our new Ship Build Assembly Hall was officially named as the Janet Harvey Hall and opened by the Lord Provost of Glasgow at an event at our Govan shipyard.

-         Our Submarines business is executing across three long-term programmes: Astute, Dreadnought and SSN-AUKUS. Our focus remains on strengthening our workforce, supply chain and infrastructure to provide the capability, capacity and resilience required to deliver these programmes.

-         We will continue to work alongside ASC Pty Ltd to deliver initial mobilisation activities to support Australia's SSN-AUKUS programme.

-         Preparations for the commencement of the construction of the sixth Type 26 frigate, HMS Newcastle, are well underway with long-lead equipment items already in progress .

-         In Australia, we are a key partner to the Commonwealth in the delivery of its National Defence Strategy, which seeks a strategy of denial and an integrated, focused force. AUKUS nuclear-powered submarines, an enhanced lethality surface fleet, strategic surveillance and long-range strike are prioritised in the Integrated Investment Plan which supports this.

-         Our Defence Solutions business has exported the second Commander SL radar to an international customer. We have a number of exciting technology programmes in development, including our Next Generation Explosives, fusing and adaptable ammunition.

1.         Including share of equity accounted investments.

2.         The purposes and definitions of non-GAAP measures are provided in the Alternative performance measures section on page 38.

3.         Growth rates for sales and underlying EBIT are on a constant currency basis. All other growth rates and year-on-year movements are on a reported currency basis.

-         We established an Innovation & Strategy organisation that will leverage the collective technological strengths, partnerships and expertise, enabling the Intelligence & Security business to effectively adapt to the rapidly evolving defence and security landscape.

-         To capitalise on a growing US border security budget, our Intelligence & Security business participated in the Customs and Border Protection Border Security Expo where we displayed our view of an integrated digital border, which included an autonomous vehicle with counter-UAS technology and an integrated sensor package.

-         To continue to address the growing operational planning and rehearsal market, we have grown our software development workforce and made internal investments to enhance our Bohemia Interactive Simulations products on prime contracts and to fund advancements in artificial intelligence capabilities.

-         In Digital Intelligence, our space business continues to focus on the readiness of our low earth orbit satellite, Azalea, for launch later this year, to deliver high quality information and intelligence in real time. In National Security and Government, we are focused on transitioning our work to new frameworks secured in 2024. Our Defence business continues to progress campaigns for key programmes.

-         Following the acquisition of Kirintec, we have continued the integration programme. Kirintec provides electronic warfare capabilities within our Digital Intelligence business and specialises in cyber and electromagnetic activities alongside the production of counter-improvised explosive devices and counter-UAS products for military customers.

-         In January 2025, our Air and Space Force Solutions business secured a contract for $799m (£616m) to extend our Integration Support Contract services to the US Air Force with options through to July 2027.

-         Our Intelligence Solutions business won two additional task orders on the National Geospatial-Intelligence Agency GEO-SPI B Indefinite Duration Indefinite Quantity (IDIQ) contract. Since its initial award in 2023, the business has secured a total of 11 task orders on this IDIQ with 
a combined value of more than $500m (£385m).

-         Our Integrated Defense Solutions business was awarded multiple re-compete contracts in the first half of the year with a combined total potential lifecycle value of more than $250m (£193m).

-         We secured a $149m (£115m) prime contract from a restricted customer. This award represents the continuation of programme management and financial intelligence support for an intelligence community customer.

 

 

 

-         Our Intelligence & Security business maintains a strong pipeline of qualified business opportunities. Although the US Department of Defense has experienced procurement decision delays, we are observing a notable demand for capabilities aligned to the current administration's priorities, particularly in areas such as border security and nuclear deterrence.

-         The US defence services market remains competitive and our Intelligence & Security business is focused on adapting to evolving customer requirements to ensure we continue to deliver mission-critical solutions.

-         In our Digital Intelligence business, we continue to progress the transformation roadmap to ensure we are well placed to take advantage of favourable market conditions over the medium and long term. We are continuing to drive operational efficiencies, through system integration and the simplified organisational structure embedded at the beginning of the year.

-         Investment in our product portfolio continues with good progress made on developing cross-domain products for the US and other international markets, low earth orbit satellites and multi-domain network solutions for the defence market.

(a)      DTR 4.2.7R of the Disclosure Guidance and Transparency Rules (DTR), being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

(b)     DTR 4.2.8R of the DTR, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Company during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

 

-         Amendments to IAS 21: Lack of Exchangeability.

 

-         Electronic Systems comprises the US- and UK-based electronics solutions business and the US-based SMS business, which have been aggregated together due to the similarities of the services offered. The teams deliver electronic warfare systems, navigation systems, electro-optical sensors, military and commercial digital engine and flight controls, precision guidance and seeker solutions, next-generation military communications systems and data links, persistent surveillance capabilities, electric drive propulsion systems as well as space electronics, spacecraft and ground systems.

-         Platforms & Services, with operations in the US, Sweden and UK, manufactures and upgrades combat vehicles, weapons and munitions, and delivers services and sustainment activities, including naval ship repair, and the management and operation of two government owned, contractor-operated ammunition plants.

-         Air comprises the Group's UK‑based air build and support activities for European and international markets, US programmes, development of our Future Combat Air System and FalconWorks®, alongside our business in the Kingdom of Saudi Arabia and interests in our European joint ventures: Eurofighter and MBDA.

-         Maritime comprises the Group's UK-based maritime and land activities, including ship build and support activities, major submarine build programmes, as well as our Australian business.

-         Cyber & Intelligence comprises the US-based Intelligence & Security business and UK-headquartered Digital Intelligence business, which have been aggregated together due to the similarities of the services offered. Together, they cover the Group's cyber security activities for national security, central government and government enterprises.

-         HQ comprises the Group's head office and UK-based shared services activities.

	Revenue from external customers			Intra-group revenue
	Six months ended 30 June 2025	Six months ended 30 June 2024		Six months ended 30 June 2025	Six months ended 30 June 2024
	£m	£m		£m	£m
Electronic Systems	3,484	3,304		108	90
Platforms & Services	2,433	2,028		37	33
Air	3,445	3,234		25	18
Maritime	3,095	2,802		37	43
Cyber & Intelligence	1,110	1,109		76	73
HQ	4	-		15	5
	13,571	12,477		298	262

 

1.         Sales is an alternative performance measure defined in the Alternative performance measures section on page 38. Sales includes both revenue from the Group's own subsidiaries as well as recognising the strategic importance in its industry of its equity accounted investments. It is presented here as our internal measure of segmental performance and to provide additional information on performance to the user.

2.         Underlying EBIT is an alternative performance measure defined in the Alternative performance measures section on page 38. It provides a measure of operating profitability, excluding one-off events or adjusting items that are not considered to be part of the ongoing operational transactions of the business, to enable management to monitor the performance of recurring operations over time, and which is comparable across the Group. It is presented here as our internal measure of segmental performance and to provide additional information on performance to the user.

1.         Comprises gains and losses on derivative financial instruments, principally held to manage the Group's exposure to interest rate fluctuations on current and anticipated external borrowings and exchange rate fluctuations on balances with the Group's subsidiaries and equity accounted investments.

2.         The net gain or loss on remeasurement of financial instruments at fair value through profit or loss and the net gain or loss on foreign exchange are presented within finance costs as the gains and losses relate to the same underlying transactions.

3.         Foreign exchange gains primarily reflects exchange rate movements on US dollar-denominated borrowings and balances with the Group's subsidiaries and equity accounted investments.

-         meeting its pension obligations;

-         investing in research and technology and pursuing other organic investment opportunities;

-         paying dividends in line with the Group's policy of long-term sustainable cover of around two times underlying earnings;

-         making accelerated returns of capital to shareholders when the balance sheet allows and when the return from doing so is in excess of the Group's weighted average cost of capital; and

-         investing in value-enhancing acquisitions, where market conditions are right and where they deliver on the Group's strategy.

-         the fair values of forward foreign exchange contracts are calculated by discounting the contracted forward values and translating at the appropriate balance sheet rates;

-         the fair values of both interest rate and cross-currency swaps are calculated by discounting expected future principal and interest cash flows and translating at the appropriate balance sheet rates; and

-         the fair values of money market funds are calculated by multiplying the net asset value per share by the investment held at the balance sheet date.

-         Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

-         Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

-         Level 3 - Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).

 

Reconciliation of underlying EBIT to underlying earnings	Six months ended 30 June 2025	Six months ended 30 June 2024
	£m	£m
Underlying EBIT	1,550	1,393
Group and equity accounted investments' underlying net finance costs (see reconciliation on page 40)	(203)	(180)
Underlying tax expense (see reconciliation on page 41)	(264)	(225)
Underlying profit for the period	1,083	988
Deduct: Non-controlling interests	(42)	(40)
Underlying earnings for the period attributable to equity shareholders	1,041	948
Weighted average number of ordinary shares used in calculating basic EPS	2,999	3,016
Underlying EPS - basic	34.7p	31.4p
Weighted average number of ordinary shares used in calculating diluted EPS	3,028	3,054
Underlying EPS - diluted	34.4p	31.0p

 

Underlying effective tax rate

20 %

19 %

Reconciliation of operating business cash flow to net cash flow from operating activities by reporting segment
	Operating business cash flow			Deduct: Dividends received from equity accounted investments			Add back: Net capital expenditure, lease principal amounts and financial investment			Net cash flow from operating activities
	Six months ended 30 June 2025	Six months ended 30 June 2024		Six months ended 30 June 2025	Six months ended 30 June 2024		Six months ended 30 June 2025	Six months ended 30 June 2024		Six months ended 30 June 2025	Six months ended 30 June 2024
	£m	£m		£m	£m		£m	£m		£m	£m
Electronic Systems	298	184		(5)	(6)		81	86		374	264
Platforms & Services	(252)	(13)		-	-		106	96		(146)	83
Air	214	724		(276)	(135)		99	108		37	697
Maritime	(150)	(247)		(6)	(4)		148	160		(8)	(91)
Cyber & Intelligence	(23)	16		-	-		35	24		12	40
HQ	(95)	(190)		-	-		34	34		(61)	(156)
	(8)	474		(287)	(145)		503	508		208	837
Tax paid net of research and development expenditure credits received										(134)	(80)
Net cash flow from operating activities										74	757

 

1.         Order book represents the transaction price allocated to unsatisfied and partially satisfied performance obligations as defined by IFRS 15 Revenue from Contracts with Customers.