Babcock gains momentum in an ‘uncertain world’
Babcock reported a significant jump in full-year profit and revenue as heightened military tensions continue to prop up European defence contractors.
Operating profit increased 17 per cent to £363m on an underlying basis, while revenue grew 11 per cent to £4.8bn.
Net debts fell to £373m including leases, down from £435m the year before.
Shares rose more than four per cent in early deals as investors continue to buy in on the global defence boom.
The combination of increasing global geopolitical tension and a more inwardly focused US has seen European defence stocks soar in recent months.
Babcock’s contracted backlog now sits at £10.1bn, up from £9.5bn at the halfway mark last year following a string of awards.
The firm won an €800m (£684m) deal with the French Navy in January to supply military air training solutions.
In March, it secured a five-year extension to a military land equipment support contract worht around £1bn with the British Army.
“In an uncertain world, we continue to see momentum across the business,” Babcock chief executive David Lockwood said in a statement.
“This has driven strong performance in all four of our divisions in the fourth quarter, resulting in full year underlying operating profit ahead of expectations.
“Our experience, know-how and application of technology play a critical role in ensuring that our customers are ready to respond to ever-changing global threats.”
Shares have risen more than 50 per cent this year to date.
Further details for Babcock’s outlook will be provided at its preliminary results on 25 June.