Babcock International Group, a prominent defense contractor for the UK government, has announced its financial results for the first half of the fiscal year. Despite a decrease in the contract backlog, the company’s pretax profit has increased, prompting the reinstatement of dividend payments.
Profit Surge and Revenue Growth
For the half year ending on September 30, Babcock reported a pretax profit of GBP136.1 million, a significant rise from the previous year’s GBP51.2 million. Additionally, the underlying operating profit reached GBP154.4 million compared to GBP121.7 million, reflecting strong financial performance.
The company’s revenue also demonstrated growth, reaching GBP2.18 billion from GBP2.14 billion. This surpassed market expectations, which anticipated a revenue of GBP2.09 billion.
Contract Backlog and Future Growth
While the contract backlog decreased to GBP9.6 billion due to disposals, it is worth noting that it has slightly increased compared to the end of March. Babcock attributes this growth to new contract awards and agreements, indicating positive prospects for future expansion.
In light of their improved financial performance, Babcock has decided to reinstate dividend payments. The board declared an interim dividend of 1.7 pence per share, providing a return to shareholders.
Stable Revenue Outlook
Babcock is confident in its revenue outlook for fiscal year 2024, with more than 90% of the forecasted revenue already under contract as of September. The company enters the second half with momentum and remains well-positioned for continued success.