18th May 2015 06:15
LONDON (Alliance News) - Babcock International Group PLC Monday reported strong growth in pretax profit for its last financial year as revenue was buoyed by major new contract wins and acquisitions.
The engineering support services company focused on infrastructure and big projects reported a pretax profit of GBP313.1 million for the year to end-March, up from GBP218.8 million a year earlier as its own revenue rose to GBP4.00 billion from GBP3.32 billion. Revenue including its share of joint venture and associates' revenue rose to GBP4.50 billion, from GBP3.55 billion.
Its closely-watched pretax profit, which also includes profit from joint ventures and associates but excludes exceptional items and amortisation of acquired intangibles rose to GBP417.7 million from GBP316.1 million.
Babcock raised its full-year dividend to 23.6 pence, from 21.4p, to reflect the improved financial performance.
"Babcock performed strongly last year, both organically and through acquisitions. We achieved double digit organic growth in revenue and operating profit driven by major contract wins and by expanding the size and scope of existing contracts. Growth from Marine and Technology and Support Services has been particularly compelling," Chief Executive Peter Rogers said.
"Our recent acquisitions have continued to perform in line with our expectations and have created an excellent platform for future growth," he added.
Babcock said it remains confident about its long-term prospects and expects to "make further good progress" in the current financial year. It said it has excellent revenue visibility after its order book grew to GBP20 billion, from about GBP11.5 billion at the end of March 2014. It has started the current year with over 80% of expected revenue already contracted and also has visibility on half the expected revenue for its next financial year.
"Throughout the year it steadily increased as we reached final signature on a number of major contract wins, including contracts for Magnox civil nuclear decommissioning, London Fire Brigade vehicle support, Defence Support Group military vehicle support and the Maritime Support Delivery Framework," it said.
The bid pipeline includes about GBP1 billion of opportunities from MCS, the business formerly called Avincis that it bought last May. It said the business delivered 22% revenue growth in the last financial year.
By Steve McGrath; [email protected]; @stevemcgrath1
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