Babcock reports rise in annual profits and revenues

19th May 2014 07:06

Babcock International Group reported a 15 per cent rise in annual pre-tax profit as the engineering support services company achieved growth across all divisions. Revenue climbed 9% to £3.5bn in the year to end of March 2014, driven by the strong performance of the Marine and Technology division which saw revenue rise by 15%. That arm of its business was boosted by higher volumes in the UK on the Queen Elizabeth aircraft carrier programme and the refit of HMS Ocean along with a rise in work in Canada on the submarine programme. The division also gained an increase in commercial activities for oil and gas customers.Revenue for the Defence and Security division increased by 4% as a rise in infrastructure activities in the UK and Germany offset a fall in revenue following the completion of construction activities at the Royal School of Military Engineering and soft FM activities on the Fleet Outsourcing Activities Project (FOAP) training contract. The Support Services division delivered revenue growth of 10% while International revenue was 18% higher in local South African currency but flat in Sterling terms due to a weak Rand.Total operating profit jumped 9% to £377.9m and the operating margin remained stable at 10.7%. The group raised its full-year dividend by 13% to 21.4p.Chief Executive, Peter Rogers, said: "Babcock maintained its record of delivering strong revenue and profit growth with all our divisions making progress, building on our leading position in engineering support services. We produced a top-class financial performance, driving strong cash flow and cash conversion, delivering another year of growth in shareholder value.""Our markets remain buoyant and we enter the new financial year with a powerful platform for further growth in the UK and overseas. Building on the strong growth in revenue and earnings delivered in the 2013/14 financial year, the Board is confident the group will continue to make further strong progress in the 2014/15 financial year."RD