Defence giant BAE Systems has said both sales and profits rose over the year to 31 December.

Profit before tax increased 5.6% to £1.15bn ($1.43bn).

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Total sales increased to £19bn from £17.9bn in 2015, but this was mainly due to favourable currency movements.

BAE Systems, one of the world's largest defence companies, has been boosted by expanding defence budgets around the globe. The firm said it expects its earnings per share to be 5% to 10% higher than last year's earnings of 40.3p in 2017.

Chief executive Ian King said: "2016 was a good year for BAE Systems. Our strategy is well defined; we have a large order backlog, long-term programme positions, strong programme execution and a well-balanced portfolio.

"With an improved outlook for defence budgets in a number of our markets, we are well placed to continue to generate attractive returns for shareholders."

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The company said it saw "encouraging signs" of a return to growth in defence budgets in the US – the world's biggest military spender.

"Our business benefits from a large order backlog, with established positions on long-term programmes in the US, UK, Saudi Arabia and Australia," it stated.

The firm increased its full-year dividend payments by 2% to 21.3 per share.

King is retiring as BAE Systems' CEO this summer and he will be succeeded by chief operating officer Charles Woodburn.

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