Babcock International PLC (LSE:BAB) shares spiked to a four-year high on Wednesday as the defence contractor's half-year profits beat expectations.
Revenue of £2.4 billion for the six months to 30 September was up 11% organically, driven by strong growth in both its Nuclear (submarines and power infrastructure) and Land (from military vehicles to rail engineering and emergency services training) divisions.
Nuclear revenues were up 22%, including Civil up 30%, while Land revenues rose 9%. The Marine division's revenue was up 6%, while Aviation revenue declined slightly due to the completion of aircraft delivery phases within a French defence contract.
Group underlying profit (EBITA) climbed 9% to £168.9 million and profit before tax improved 12% to £157.1 million.
The interim dividend was increased 18% to 2p and bet debt was reduced to £146 million from £211 million in March following increased free cash flow of £95 million.
Chief executive David Lockwood hailed "continued positive momentum across the group" and said expectations for the full year remained unchanged.
With around 90% of full-year expected revenue under contract, the second half started with "good momentum", and Lockwood said, "A backdrop of geopolitical instability means demand for what we do continues to increase, resulting in an expanding and attractive long-term opportunity set".
Shares in the group jumped to 594p in early trading, their highest since early 2020, though by mid-morning they had tailed off to 532.5p, still a gain of 6% on the day.