Press Association
Thursday 24th May 2012
BAE Systems will face questions on Thursday over the threat of closure of its Portsmouth shipyard and the failure of its Eurofighter consortium to land a large contract to supply fighter jets to India.
The group, which is one of the UK's biggest manufacturing employers, is expected to report a 10% fall in underlying earnings to £2 billion in 2011 as defence spending in the UK and the US comes under pressure.
Revenues are set to be down by about £2 billion to £20 billion as a result of a reduction in supply orders to the US Army after it pulled out of Iraq and a delay in an order for Eurofighters to Saudi Arabia. BAE recently put its warship business under review in a move which could reportedly lead to the closure of its yard in Portsmouth, Hampshire.
It employs 1,500 people at the site, while a similar number of jobs are provided in support roles. Its closure could potentially land taxpayers with a bill for up to £600 million because within a contract signed in 2009 the Ministry of Defence guaranteed BAE work for the next 15 years and is bound to shoulder the expense of any yard closures.
BAE last year signalled the end of production at its factory in Brough, Yorkshire, which employed 1,300 workers, as part of a round of 3,000 redundancies at sites across the UK. It had already cut more than 15,000 jobs across its global operations over the previous two years in order to boost competitiveness.
Meanwhile, chocolatier Thorntons will be hoping that new ranges in the run up to Valentine's Day lift it out of its trading slump. The group recently warned it will roughly break even in the year to June, compared with £4.3 million profit in the previous year, as it is forced to drop prices to drum up trade.
The Derbyshire-based group, which employs 3,000 staff and has a 7.7% share of the UK chocolate market, has already revealed that like-for-like sales fell by a worse-than-expected 4.2% in the second quarter of its financial year.
Its share price has fallen 85% to its lowest level in two decades, giving the company a market value of just £10 million.
Domino's Pizza will roll out more strong profits on Wednesday while the Olympics and Euro 2012 are set to provide a further boost in the coming months. The group, which has 726 stores in the UK, Ireland and Germany, grew sales by 9.4% to £530.6 million in 2011, helped by opening a record 62 sites.
Douglas Jack, an analyst at Numis Securities, expects the group to report that profits grew by 10.5% to £42 million in 2011.
