Babcock International Group Plc (LON:BAB) has releasesd full year results in line with market expectations, thanks to 2.5% growth in revenue.
It generated some £4.65bn for the twelve months ended March 31, which supported a 3.1% increase in operation profit to £370.6mln and a 8% rise in net profit of £391.1mln.
Earnings per share improved by 7.8% to 66.6p, up from 61.8p in the previous year.
READ: Babcock lowers revenue guidance on tough trading
The engineering group highlighted its £31bn pipeline and order book, whilst telling investors that 76% of underlying revenue is presently in place for the current financial year.
Net debt reduced by 5% to £1.1bn, meanwhile, the full year dividend increased 4.8% to 29.5p up from 28.15p in 2017.
Archie Bethel, Babcock chief executive, described it as a “year of further progress on all fronts”.
“Underlying revenue and profits increased to record levels with excellent cash generation, and we further strengthened the balance sheet by reducing our net debt while increasing our dividend for the seventeenth consecutive year,” Bethel said.
He added: “We have always been a specialist engineering services company with a strong UK heritage but the changes we have made in the last couple of years are beginning to deliver meaningful benefits.
“Our new sector structure is making a real difference, we are increasingly focused on our core business areas of defence, emergency services and civil nuclear, and are on track to exceed our target of having 30% of the group's underlying revenue coming from international markets by 2022.”
Elsewhere, Liberum Capital analyst Joe Brent said the results were “bang in line” and were without “funnies”.
“Babcock remains cheap, despite our view that the reasons for caution are beginning to abate,” the analyst said in a note.
Liberum rates Babcock as a ‘buy’ with a 1,100p price target which suggests some 40% upside to the current price.