BAE Systems, Britain’s biggest defence contractor, on Friday reported a 26 per cent rise in first-half profits and offered a confident outlook for the year, saying it would continue to benefit from strong demand for armoured vehicles.

The company beat analysts’ expectations, announcing earnings before interest tax and amortisation for the six months to June 30 of £881m, including an exceptional profit of £61m on the disposal of a business. Pre-tax profit grew to £791m from £657m last year.