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December 8, 2021

Babcock International reports strong half year performance

The company posted an operating profit of £75.4m in the six-month period leading up to 30 September 2021.

British engineering company Babcock International has reported a strong performance in the six-month period that ended on 30 September 2021.

In the first half of FY22, the company’s revenue totalled £2.23bn. This figure marks an 8% increase from £2.05bn reported in the same period last year.

The increase was attributed to business growth primarily in the marine and nuclear sectors, as well as fewer Covid-19 related restrictions.

The company also recovered from the heavy losses it experienced last year and posted an operating profit of £75.4m in the first half of FY22. In the same period last year, Babcock registered an operating loss of £785.3m.

Its underlying operating profit increased from £84.5m to £115.3m on a year-on-year (YoY) basis.

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The business’ underlying profit before tax totalled £98.7m for the six months leading up to September 2021, compared to £58.2m in the same period of 2020.

Babcock’s statutory profit before tax was £58.8m in the first half of FY22, compared to a loss of £811.6m in first half of FY21.

The company’s contract backlog also improved from £9.4bn to £10.9bn YoY.

Babcock CEO David Lockwood said: “We are on-track with our turnaround strategy with around £400m of disposals to bolster our balance sheet announced to date.

“We will continue to align our portfolio to best support the Group’s capital allocation priorities and future growth. The ongoing implementation of our new operating model means Babcock will be a simplified, more focused Group.

“We are pursuing a number of important growth opportunities, with significant contract wins in military communications, our first order for an export licence for our Arrowhead 140 frigate as part of the Type 31 programme, and an agreement for potentially significant work in Ukraine, supported by both the UK and the Ukrainian governments.”

The UK’s Ministry of Defence (MoD) is one of the company’s biggest clients.

In September this year, Babcock secured a £110m MoD contract to deliver the new defence strategic radio service (DSRS) to critical military operations.

Babcock also kept its full year outlook unchanged as its new operating model is expected to deliver approximately £20m in savings in this financial year.

 

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