Defence giant BAE Systems has reported a drop in operating profits after a hit to its cyber security business.

The weaponry manufacturer, which employs 1,350 people in Marconi Way, Rochester, said lower growth forecasts for its applied intelligence division put a £384 million dent on its finances.

It added it expects earnings per share to flatline this year.

Although operating profit was down 15% to just below £1.5 billion, sales increased 3% to £19.6 billion while underlying earnings were up 7% to more than £2 billion.

Chief executive Charles Woodburn said: "We delivered a good performance in 2017, consistent with our expectations for the year.

"We start 2018 with a streamlined organisation and a strong focus on programme execution, technology and enhanced competitiveness, providing a solid foundation for medium-term growth.

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

In contrast to the cyber security business, BAE's Rochester site is undergoing a period of growth.

It has 68 staff vacancies and expects to hire bout 500 new staff by 2022 to cope with the forecasted workload.