Babcock backs FY expectations as H1 profit grows
FTSE 250 defence company Babcock reported a jump in first-half pre-tax profit on Wednesday as a solid performance from its marine business offset a weaker showing in the aviation segment.
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In the six months to the end of September, statutory pre-tax profit rose to £152.5m from £65.1m in the first half of last year. However, underlying pre-tax profit declined to £202.5m from £245.5m and revenue fell to £2.19bn from £2.25bn, reflecting step downs in the company's Queen Elizabeth Aircraft Carriers contract and the impact of exits and disposals in the last financial year.
The interim dividend was lifted a touch to 7.2p a share from 7.1p.
Babcock secured contract wins worth around £3.5bn during the half, while the combined order book grew 10% since March 2019 to a record £34bn.
Chief executive Archie Bethel said: "Today's results show we are doing what we said we would do. Our delivery in the first half is in line with our expectations, with good performance across most of the group. In particular, strong performance from our marine business has offset some weakness in the aviation sector."
Babcock backed its expectations for the year and said stronger-than-expected trading in its marine and land sectors is expected to continue to offset weaker trading in aviation. The company expects underlying revenue of around £4.9bn and underlying operating profit of between £540m and £560m.
It also announced that it has secured a £300m contract to provide training for the Metropolitan Police service.