BAE says cyber security deals will offset squeeze on public sector spending

Defence contractor BAE Systems has offset a drop in earnings in the six months to 30 June 30 from £10.6bn in 2010 to £9.2bn by hiking its dividend by seven per cent and announcing the purchase of £500m of its shares, widely considered a good move.

It attributed the drop in earnings to a reduction in public sector contracts, but said that the private sector side of its business was doing well.

BAE said its advanced cyber security service Detica Treidan was a particularly high performer, as it secured new customers in both the defence industry and commercial sectors.

Detica Treidan uses behavioural analysis tools to understand where an attack is a random unskilled attempt, and where it may be an example of something more co-ordinated and sophisticated.

The product aims to give its customers enough warning to prevent a costly breach, or at least limit its scale.

In its financials, BAE admitted that government contracts were becoming harder to win, but that it had secured some new contracts.

"While the UK government market continues to be challenging, BAE Systems Detica has won contracts to supply information assurance, cyber security and integration services for clients including the Ministry of Justice, Transport for London and the MoD as well as a contract to provide a mobile data solution to Strathclyde Police, which follows on from the successful delivery of similar capability to the Metropolitan Police Service."

Martin Sutherland, managing director of BAE Systems Detica, was bullish about the company's prospects in the face of reduced public sector spending.

"Detica's advanced data management, security and analytics capabilities mean that despite public-sector spending cuts, the company is well positioned to help increase both the efficiency and the effectiveness of government services."

The company is also involved in bidding for the rollout of the UK's smart metering energy solution, along with consortium partners BT and Arqiva.

BAE Systems describes its role as: "The provision of cyber and security services associated with the rollout of the communications infrastructure."