Defence engineering giant Babcock International Group has said it has continued to make “good progress” following the after effects of the Covid-19 pandemic as it reported flat revenues and marginally dipped profits.
The group’s half-year results for the six months to September 30, 2022, show it made a statutory operating profit of £72.8m down from £75.4m a year earlier.
Revenue rose from £2.14bn to £2.13bn in the same period in 2021, when it ultimately swung back into the red having made a full-year loss of £785.3m in 2020.
Bosses at the global firm, which recently recruited more than 200 new apprentices and graduates to its Devonport operations in Plymouth, said they were maintaining expectations for the rest of the current financial year.
The board said a “strong contract backlog” worth £9.9bn had been maintained through the period with more than 90% of the 2023 financial year’s revenue under contract as of the end of September.
Babcock said highlights from the reported trading period included a major £500m, 10-year contract to upgrade, operate and support Australia’s high frequency communications capability for the Australia Defence Force.
It also won a six-year deal with the UK Royal Navy to install and provide in-service support for the maritime Communications Electronic Support Measures capability on the navy’s Type 23 frigate ship.
Chief executive David Lockwood said: “Whilst there is still more to be done, the significant contracts won this year underpin our confidence in our potential to deliver sustained growth and capture margin upside over the medium term.
“We are operating in a macro economic and geopolitical environment that remains volatile. We are focused on effectively addressing the challenges our business faces, most notably inflationary pressures, whilst also ensuring we maximise the increased opportunity set we are seeing in a market backdrop that is supportive for defence.”
Babcock's Devonport Royal Dockyard facility in Plymouth is co-located with HM Naval Base Devonport, to form the largest naval support site in Western Europe. The company works in partnership with the Ministry of Defence (MoD) to provide support for submarines, surface ships and associated systems and equipment.
The company recently renewed a military flying training contract with the Royal Air Force.
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