UK defence firms have reported soaring profits and robust revenue growth in the first half of 2024, bolstered by the geopolitical tensions and conflicts reshaping the global landscape. The ongoing Russia-Ukraine war, Israel’s conflicts in Gaza and Lebanon, and rising tensions between the US and China in the Asia-Pacific region have created a lucrative environment for British defence companies.
Industry Highlights
Rolls-Royce Defence
The company experienced a profit surge of over two-thirds, with revenues also rising sharply. Strategic cost-cutting measures and a significant increase in orders fueled this impressive growth.
BAE Systems
The UK’s largest defence firm posted a better-than-expected profit, further solidifying its leadership in the sector.
Babcock International
Babcock continued its upward trajectory in 2024, delivering strong financial growth and reasserting its position in the global market.
QinetiQ
The company reported steady financial gains, with consistent growth across its operations.
Serco
In contrast to its peers, Serco faced slight declines in profits and revenues, struggling to keep pace with industry-wide momentum.
Resilient Growth Amid Challenges
The UK’s defence sector has thrived despite supply chain disruptions, high energy costs, and economic uncertainty. According to ADS, the British trade association, the industry’s turnover rose to £28 billion ($35.5 billion) in 2023, up from £22.8 billion ($29 billion) in 2022.
This growth trajectory reflects the momentum built over the past two years, as British defence companies have capitalized on global instability. Firms featured in the global top 100 have consistently increased revenues since the onset of the Russia-Ukraine conflict.
Industry Leadership
“In a year marked by rising instability across Europe, the Middle East, and other parts of the world, our role in safeguarding national security has never been more critical,” said Charles Woodburn, CEO of BAE Systems, reflecting on the company’s strong performance in 2023.
Notably, Babcock International re-entered the global top 100 defence companies in 2023, overtaking competitors like Serco and QinetiQ.
Outlook
As geopolitical tensions persist, the UK defence sector is poised to sustain its growth, reaffirming its adaptability and resilience in challenging times. With increasing investments and a critical role in global security, British defence companies remain at the forefront of the industry’s expansion.
