Babcock trading in line with expectations, reiterates guidance

In an update for the period from 1 April, Babcock said its marine division performed well, with increased activity across the UK warship support business and strong orders across the technology unit.

During the period, the company was selected as the preferred bidder for the Type 31 general-purpose frigate programme, which will provide the UK with a fleet of five new warships for £1.25bn.

Babcock said it continued to make good progress across its defence support group business and successfully transitioned to a new contract in rail.

In the nuclear segment, activity levels increased across defence though the civil nuclear market remained "challenging".

Babcock's aviation division saw the successful start of new international businesses in Canada and Norway and it made continued progress across its military businesses.

While Babcock saw some delays in the award of new contracts in aviation, overall bidding activity across the sector increased.

The group also highlighted the fact that it had seen an improvement in its South African operations.

Babcock confirmed its full-year guidance for revenue, operating profit and free cash flow, including the phasing between the first and second halves of the year, especially for cash generation.

As of 0830 BST, Babcock shares were up 3.84% at 562p.