By Marcus Leach

UK defence company BAE Systems have reported a decrease in profits due to military spending cuts.

Pre-tax profits for the opening six months of the year were down from £781 million a year ago to £691 million. Further to that global sales dropped 13% to £9.2 billion.

Despite this, BAE announced a dividend rise of 7% and a share buy-back scheme.

BAE also benefited heavily from a one off payment of £125 million from the UK Ministry of Defence in compensation for contract changes over the past nine years.

"We continue top pursue the fast lanes of growth in the areas of military and technical services, cyber and intelligence and high-end electronics," chief executive Ian King said.

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