Babcock unveils strong progress in full-year results

published 3 April 2013

UK engineering company Babcock International Group said on Wednesday its annual results will show 'strong progress' on the previous year.

In a trading statement ahead of the firm's results for the year ended March 31st 2013, Babcock announced it had traded well on a healthy pipeline of contracts in civil and military markets.

The order book remained stable at £12bn. Since the half-year results, the group has won agreements and been chosen as preferred bidder on contracts valued at over £1.0bn.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Contracts at preferred bidder stage are expected to be transfered into the order book over the next few months.

Babcock was picked as preferred bidder for contracts on the British Airways and baggage handling systems operations and maintenance for Heathrow Airport.

The contracts have a combined value of £440m over a period of five years.

The company is also preferred bidder for the design of two boat sets of weapon handling and launch equipment for an international customer worth £100m and for equipment procurement contracts in the UK and internationally for the marine and technology division worth £50m.

Discussions with the Ministry of Defence relating to a maritime support delivery framework contract are also progressing.

The bid pipeline has increased to £15.5bn from £14bn with the most significant being the logistics and commodities services transformation contract. The defence and security division has teamed up with DHL for a possible joint venture.

"The scale of our order book continues to provide excellent visibility of future revenue streams across the group," Babcock said in a statement.

"This position is further strengthened by the medium to long-term growth opportunities which continue to flow into tracking and then into the bid pipeline.

"We remain well positioned to help our customers develop cost efficient support solutions and we believe the current economic climate will continue to create significant medium and long-term growth opportunities for the group, both in the UK and overseas."