Babcock sees further growth as it reports record profit

Underlying pre-tax profit for the year to the end of March rose 3.6% to £512.5m on equivalent revenue up 2.8% to £5.36bn. The company increased its annual dividend 4.8% to 29.5p a share.

Babcock, which maintains the UK’s nuclear submarines and helps maintain the Queen Elizabeth Class aircraft carriers, said a £31bn pipeline of projects gave it confidence about its prospects. Its biggest customer is the Ministry of Defence, which is under pressure to make further spending cuts under the government’s austerity plan.

The engineering company has been seeking to increase international revenues, which rose to 28% of the group total from 25% a year earlier. Its shares, which fell heavily in early 2018 after government outsourcer Carillion went bust, rose 3% to 787p.

Chief executive Archie Bethel said: “I am pleased to report another year of further progress on all fronts. Underlying revenue and profits increased to record levels with excellent cash generation, and we further strengthened the balance sheet by reducing our net debt while increasing our dividend for the 17th consecutive year. We expect to make further progress this year.”