5th Jun 2019 08:32
LONDON (Alliance News) - Babcock International Group PLC announced its medium-term targets ahead of a capital markets day on Wednesday, with a focus on a trio of core sectors for the firm.
The FTSE 250-listed engineering services firm explained that for the period following March 2020 it is targeting earnings growth at a compound annual growth rate of between 3% and 5%. It also intends to retain margins at "around" 11%.
Over the next five years, Babcock is targeting generating around GBP1.4 billion in free cash flow after growing cash flow in line with earnings. It also intends to continue to reduce its net debt levels and deliver a "sustainable dividend".
For the financial year ended March 2019, Babcock generated underlying operating margins at 11.4%. Net debt fell to GBP957.7 million from GBP1.12 billion the year prior.
In order to deliver these medium-term targets, Babcock explained it would focus on its three markets in which it has "strong leadership positions": Defence, Emergency Services and Civil Nuclear.
Babcock intends to increased its shares of total revenue from these three markets to over 85% from the current 75%. The firm is also targeting increasing its international revenue share to 40% from the current 30%.
Shares in Babcock were 2.4% higher at 474.80 pence on Wednesday.
Related Shares:
Babcock