19th Jul 2005 11:30
Babcock International Group PLC19 July 2005 Date: 19 July 2005 Babcock International Group PLC Annual General Meeting 2005 Chairman's Statement The following is the text of the statement being made by the Chairman of BabcockInternational Group PLC at its Annual General Meeting being held today, 19th July 2005, starting at 11:30 am. "The Babcock strategy during the last 5 years has been to transform the companyfrom an engineering conglomerate into a support services business. This wasfirstly in the defence sector, but it was always the intention to broaden themarket spread to give a better balance. This was achieved with the acquisitionof the Peterhouse Group in June 2004. The last 12 months have beenpredominantly occupied with the integration of the Peterhouse businesses intothe Babcock Group. This resulted in the profits before tax (pre goodwill and exceptional items) to31st March 2005, increasing by 52% over the previous year. Not all of thisincrease, however, came as a consequence of the acquisition and the operatingprofit for the original Babcock businesses increased by 18%. We continue to win new contracts and in the last few months have been named aspreferred bidder for the Royal School of Military Engineering and for theEastern Regional Prime contracts. The latter is particularly satisfying sincewe bought the SGI business in 2003 for £26 million and this business should havea turnover in the next financial year in excess of £120 million. We alsosecured a 5-year extension to the Faslane contract, and this morning weannounced the winning of further contracts from Network Rail for high outputtrack renewals and signalling works worth in total over £200m. These ordershighlight the strong position and excellent prospects of our rail business. Theorder book now stands in excess of £2 billion, and trading is in line with ourexpectations at the time of the preliminary statement. Over the 5 years to March 2005 an investment in Babcock has outperformed aninvestment in the All Share Index (excluding investment trusts) by 124% and thatfigure would be nearly 143% if we took the 5 years to the end of June. I am also pleased to confirm that on Friday 15th July Babcock was officiallyadmitted to the FTSE 250 index, a further recognition of our transformation. The Board has been conscious that throughout a period of such dramatic changeone key priority has been to maintain a secure financial position. However,with the larger and more broadly based group the Board is now recommending afinal dividend of 2.65 pence per share giving a total for the year of 4 penceper share which is an increase over the previous year of 19.4%. Over the mediumterm, we intend to target dividend cover based on full year earnings, excludinggoodwill and exceptional items, in the range of 2.5 - 3 times." - Ends - Babcock International Group PLCPeter Rogers, Chief Executive 020 7291 5000 Financial DynamicsRichard Mountain 020 7269 7291 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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