H1 results summary BAE reports interim H1 sales (+11%), EBIT (+11%), and EPS (+6%) all slightly above (2-3%) consensus expectations. All sectors are growing well, with P&S and Maritime leading the way organically (+10% organic). Electronic Systems sales grew 34% as this includes 4 months of Space and Mission Systems contribution. The supply chain is clearly being well managed. A record Order Backlog of £74bn (vs. £66bn at H1’23) continues to provide great visibility. £15.1bn of orders in H1 (Book to Bill >1.1x), with the largest order being Hunter Class Frigates in Australia at £4.6bn. Shareholder returns The interim dividend increased 8% to 12.4p. The follow-on £1.5bn buyback programme commenced immediately after completion of the prior £1.5bn, 3-year programme was completed in 2 years. FY guidance upgraded for all key metrics EPS growth increases to +7-9% from +6-8% on FY23A EPS of 63.2p and FCF of >£1.5bn from >£1.3bn. Valuation / our view On our prior existing estimates, the shares are on a CY24E P/E of 19.4x falling to 17.1x next year, and CY24E EV/EBITDA of 11.5x, falling to 10.1x next year. The Group looks well set for long-term growth; recent company visits and meetings in Barrow-in-Furness (see note) and Farnborough reaffirmed this. Buy and 1500p TP reiterated.