Strong progress at Babcock, hikes dividend

Engineering support services company Babcock reported a robust set of annual results, lifted its dividend payment and said it is well positioned for strong progress in the year ahead.

Underlying pre-tax profit rose 16% to £317.8m for the year ended March 31st 2013 compared to a year earlier. Revenue climbed 6% to £3.243bn as it traded well on a healthy pipeline of contracts in civil and military markets.

The firm, which provides engineering support for the British Royal Navy, said operating profit rose to £376.6m from £329.0m while basic earnings per share increased 16% to 71.3p.

The group's order book slipped to £12bn from £13bn a year earlier but it said significant future opportunities are being progressed with the bid pipeline increasing to £15.5bn from £9.5bn in 2012.

Chief Executive Peter Rogers commented: "We generated good growth in underlying revenue and further improved our operational performance to deliver increases in operating margin, underlying earnings and shareholder value."

"The very substantial expansion of our bid pipeline reflects the continued buoyancy of our markets - public and private sector, civil and defence, UK and overseas. With our strong order book and financial base, we are well positioned for further strong progress this year."

Underlining its confidence in future trading Babcock increased its full year dividend 16% to 26.3p.

Net debt during the year fell to £550.6m from £641.1m.

CJ