"Babcock made good progress during the first half, building on our leadership position in the engineering services market. We increased revenue, profit and earnings with underlying organic revenue growth at constant exchange rates of 5%, and are maintaining our track record of increasing returns to shareholders by again raising our interim dividend. We completed our sector realignment, successfully establishing the springboard for our next phase of development. Our competitive strength is reflected in our double-digit margin, our continued strong win rates and the increase in our combined order book and pipeline to £31 billion.
"The increasing number and value of our opportunities both in the UK and internationally, where we continue to gain traction, highlights Babcock’s long-proven ability to grow despite uncertain market conditions. Our focus on technology-intensive critical services where barriers to entry are high has consistently enabled us to generate sustainable growth regardless of any decline in spending on original equipment. I expect this to remain a key element of differentiation for Babcock in the coming months and years.
"We have excellent revenue visibility with 92% of budgeted revenue now in place for FY18, and we expect a slight improvement in overall group margin during the second half. We therefore remain confident that full year results will be in line with our expectations and that we will make further good progress beyond this year."
21 November 2017
The financial and operational highlights of the half year are below. The full results can be viewed here.
• £146 million increase in underlying revenue; up 6%
• £11 million increase in underlying profit before tax; up 5%
• £6 million increase in underlying operating profit; up 2%
• Last twelve months’ free cash flow, £281 million, excluding FOMEDEC
• 4.0% increase in underlying EPS to 38.7 pence
• 5.4% increase in interim dividend to 6.85p
• IFRS 15: opening balance review complete: no changes required
• Sector realignment successfully implemented
• Order book and bid pipeline increased to c£31 billion (FY17: c£30 billion)
• 92% of revenue in place for this financial year; 59% of revenue in place for 2018/19
• French military air training mobilisation underway (FOMEDEC)
• Aircraft carriers: Queen Elizabeth on sea trials, Prince of Wales named
• Major firefighting effort across Southern Europe
• Agreed Magnox terms to contract end in 2019
• Awarded new RAF TSSP contracts in November 2017