BAE’s New Chairman Carr to Push for Bigger Non-Defense Business

BAE Systems Plc Chairman Roger Carr, who has held the post since Feb. 1, said he’ll push Europe’s largest weapons-maker to boost its non-defense activities as European and U.S. military budgets stagnate.

BAE would like to raise the sales contribution of civil work beyond the current 8 percent, Carr told shareholders today at the London-based company’s annual meeting in Farnborough.

The maker of Eurofighter warplanes, Astute submarines and Excalibur artillery shells has already made itself less reliant on British defense spending by establishing six other “home markets” around the world. While U.S. defense cuts fell short of the company’s “worst fears” and the situation in the U.K. is more stable, Carr told investors he’s keen to explore civil and commercial opportunities arising from defense technology.

“We have done well to diversify geographically and I think we should use our skills to look at whether we do so in the product area,” he said. “What we’ve got is a business that’s fundamentally defense. If we can use the skills that we’ve got in an appropriate way we will do that.”

Carr, who has previously been chairman of Cadbury Plc, utilities Centrica Plc and Thames Water Plc and brewer Mitchells & Butler Plc, said BAE’s cyber and intelligence division is “a very good part of the business” that’s helped the company boost commercial sales.

Carr reiterated February guidance for earnings per share to decline by between 5 percent and 10 percent this year, excluding currency changes. A share buyback program will be extended to the targeted 1 billion pounds ($1.7 billion) by the end of the year after reaching 429 million pounds through May 6, he said.

The chairman, successor to Dick Olver, who had held the job since 2004, said talks are continuing with unions to minimize job losses as BAE closes its shipyard in Portsmouth, southern England.

Calling this year’s vote on independence in Scotland a political issue, he said there could be an impact on jobs should a “yes” vote prompt the U.K. government to seek a relocation of remaining shipbuilding production south of the border.

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