Weapons giant BAE systems shrugged off controversies around the world to boost sales by 12% to £7.75 billion for the first half of the year.

Profits jumped by 26% to £881 million, up from £700 million this time last year. the company said that it "expected to benefit further from the current high demand for armoured wheeled vehicles".

The half has not been without difficulties in the wake of accusations by the US that the company had made illegal payments to secure a big saudi Arabian deal.

The serious fraud office was cleared by the Law Lords this week who said it was right to drop inquiries into the matter.

BAE said today it welcomed the publication of the Woolf Committee report into the company's principles and practces in May.

This month the company published its programme for implementation of the findings of the report with a view to making BAE systems "a leader in standards of ethical business conduct among global companies".

It had no comment on a report today that claims it had paid at least £20 million to a company linked to a Zimbabwean arms trader, John Bredenkamp, allied to President Robert Mugabe.

BAE said its growth was likely to continue despite budget pressures in many of its markets as governments continued to prioritise defence spending, especially in markets where troops were deployed overseas.

Sales at BAE have grown from around $1 billion in in 2004 to an annualised $10 billion today.

The last half has seen two major acquisitions - - MTC technologies in the US and Tenix, Australia's biggest defence firm - with a combined price tag of £500 million. the tenix deal more than doubles BAE systems' presence Down Under.

Other deals included the sale of the US surveillance and Attack business for a net £61 million and the more recent offer to acquire Detica Group, valuing the business at £538 million.

BAE's chief executive Mike Turner is to retire next month after six years at the top and 42 years at the company. He will be succeeded by Ian King.