Babcock maintains outlook as new year 'starts well'

Babcock, the marine and aerospace engineer, said its new financial year has begun well, with 82% of revenues for the full year already booked.

In a statement ahead of its annual shareholder meeting, the from the FTSE 100 group said its outlook for the year remained unchanged.

The order book was stable at roughly £19bn and there was around £10.5bn of work in the bid pipeline, following recent contract wins, with the tracking pipeline also "buoyant".

This provided management "confidence in our ability to grow in line with our expectations this year and over the medium term".

It was confirmed that net debt, which stood at £1.17bn at the end of its March financial year, is still expected to further reduce debt during the second half such that the ratio to earnings before interest, tax, depreciation and amortisation ratio will fall from the 1.8 times to around 1.6 times by the end of the year.

Recent wins have included a £500m contract to operate a fleet of specialist aircraft for the Norwegian Health Service, further work on the nuclear submarine decommissioning demonstrator project and the renewal of a number of emergency services aviation contracts, including two helicopter emergency medical Services contracts in Queensland, Australia.

Babcock also recently got started on a Ministry of Defence programme where it has become the marine systems support partner and systems technical authority for the Royal Navy's new Queen Elizabeth Class Aircraft Carriers and Type 45 Destroyers, expected to be worth in excess of £360m over seven years.

The joint venture with the Oman Drydock Company has formally begun with the provision of support to vessels including US Navy ships.