Babcock hikes guidance amid Skynet ramp up
Defence firm Babcock has hiked full-year guidance for revenue and profit as business in its Nuclear and Marine segments has boomed.
The FTSE 250 group said on Thursday it expects underlying operating profit to exceed the top end of analyst expectations, which were in the range of £327.1m to £339.7m.
Revenue is expected to come in at around £4.9bn, ahead of forecasts of £4.51 to £4.8bn
Babcock said the upgrade was due to “double-digit organic growth in Nuclear and strong growth in Marine.”
The firm is well-known for its production of nuclear submarines for the UK military and last year signed a mega deal with the Ministry of Defence (MoD) worth half a billion pounds.
Other tie-ups include a 17-year contract with the French Air and Space Force in January, worth up to around £665m and representing a significant expansion of its activity in the country.
Growth in nuclear was “driven by increased new build and decommissioning work in civil nuclear, as well as increased submarine support activity and higher-than-expected infrastructure revenues,” Babcock said in a statement markets.
Performance in Marine was driven by higher volumes in the company’s liquified gas business, as well as the ramp-up of Skynet, the UK’s military satellite programme.
“Today’s announcement demonstrates that successful execution of our strategy is continuing to deliver value for all our stakeholders,” Babcock Chief Executive, David Lockwood, said.
“Our engineering skills and know-how are in ever greater demand and with significant opportunities before us, I look forward to further profitable growth.”