Babcock profits rise amid uplift in global defence budgets

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".