GCIBabcock profits rise amid uplift in global defence budgets
posted a jump in full-year profit on Friday as it continued to be boosted by a "sustained uplift" in global defence budgets, with a strong performance in Nuclear, Land and Aviation.
In the 12 months to the end of March, underlying operating profit rose 34% from a year earlier to £238m, with revenue nudging down to £4.39bn from £4.44bn.
Babcock said the contract backlog grew 9% to £10.3bn, driven by Nuclear and Marine.
Chief executive David Lockwood said: "We have made good strategic progress, delivering another year of strong growth with cash flow ahead of expectations. Babcock is well positioned to benefit from the sustained uplift in global defence budgets, driven by the need to recapitalise, re-equip and modernise militaries, resulting in an increase in our opportunity set.
"We combine strong engineering know-how, high customer intimacy and extensive operational asset knowledge together with highly collaborative relationships and product development capability. This differentiated proposition is increasingly attractive to our customers. We look to the future with confidence as we continue to progress towards our medium-term targets."
The company said its expectations for FY25 remain unchanged and that with around 70% of expected revenue under contract at 1 April 2024, it enters the year "strongly positioned with good momentum".
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.