UK defence group BAE Systems has reported a drop in annual sales after defence orders fell back and has warned sales will not grow this year.

Revenues fell 14% to £19.15bn in 2011 while pre-tax profits were £1.46bn, up slightly on 2010's £1.4bn.

The drop in revenue was mainly due to a cut in orders from the US army after it pulled out of Iraq and the delay of an order for jets from Saudi Arabia.