Babcock profits up 27%

9th Nov 2010 08:30

The first benefits of the acquisition of rival support services VT Group helped Babcock put in a strong performance in its latest first half. Yesterday, the defence and support services group'd deputy chairman Lord Hesketh resigned after claiming the two new aircraft carriers his company is building for the Royal Navy will make Britain "a laughing stock".But the company shrugged that off today, with underlying profits rising by 27% to £90.9m, from £71.8m, on sales of £1.22bn up from £935m. Statutory profits fell to £44.1m from £66.1m after a raft of one-off charges following the £1.33bn VT deal."Pressure on Government spending has led to short-term delays in outsourcing programmes but we would expect this to ease during the 2011/12 financial year," Babcock said.The order book is worth about £12bn with healthy bid pipeline of around £5bn, the firm said. "The majority of this year's revenue is already contracted and we continue to increase the proportion of contracted revenue for 2011/12. During this period we have had no contracts cancelled," it added."The strength of the order book and bid pipeline, our involvement in long term programmes and proven ability to deliver efficiencies gives us confidence in the outlook for 2010/11 and thereafter," chief executive Peter Rogers commented.The interim dividend increases by 8% to 5.20p.