BAE Systems welcomes end to uncertainty over government cuts

21st October 2010, Comments 0 comments

British arms maker BAE Systems on Thursday said government cuts to defence spending would have only a "modest impact" on earnings as it welcomed an end to "uncertainties" regarding the cutbacks.

"The detail behind the changes will take some time to refine but the Group welcomes the removal of a number of uncertainties which have been overhanging the business in recent months," BAE Systems said in a statement.

"The Group anticipates some modest impact on performance of its UK business in 2010 from the changes and a reduction in the Group's financial planning assumptions resulting in an approximately one pence reduction in earnings per share, per annum, thereafter," it added.

Britain on Tuesday said it would shrink its armed forces and scrap key assets such as its flagship aircraft carrier, in a defence review that forms part of stinging cuts across the whole public sector.

Prime Minister David Cameron's coalition government followed up the announcement by unveiling the harshest spending cuts for decades on Wednesday.

Finance minister George Osborne said nearly half a million public sector jobs would go as a result of cuts totalling 83 billion pounds (95 billion euros, 130 billion dollars) as Britain aims to slash a record deficit.

© 2010 AFP

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