BAE faces shipyard questions

By MARTIN FLANAGAN
Published on 17/02/2013 00:00

BAE Systems will face a fresh grilling this week on which of its three UK shipyards, including two on the Clyde, will be shut down.

The defence giant, whose merger plan with Franco-German rival EADS collapsed in October, indicated last year that a strategic review would trigger the closure of either Govan or Scotstoun, or Portsmouth in southern England.

An original deadline for a decision at the end of 2012 has passed, as politicians north and south of the Border have pushed the case for their respective yards to escape the axe. A total of 3,500 are employed at the Scottish facilities.

One City defence analyst said: “BAE will be pressed on this issue again this week as it is commercially significant in terms of lost revenues.

“I suspect the delay on a decision has much to do with the issues being much muddied by the debate on Scottish independence, and BAE potentially being left with no UK yard after 2014 if Portsmouth was closed and the Scots voted to exit the union.

“That’s why I’m not necessarily expecting any new guidance with the results.”

BAE reports annual figures on Thursday, and broker UBS forecasts underlying earnings of £1.8 billion, down from £2bn in 2011, as the company has cut production in the face of transatlantic defence cuts.

A full-year dividend payout lifted to 19.7p from 18.8p is forecast by UBS, on earnings per share of 37.5p, compared with 39.7p in the previous year.