Babcock International Group PLC (LON:BAB) has delivered on expectations in its first half as a strong performance in its Marine division offset a decline in Aviation.
The FTSE 250 firm, which builds warships for the Royal Navy, reported an underlying pre-tax profit for the six months to 30 September of £202.5mln, down from £245.5mln in the prior year, while revenues declined to £2.46bn from £2.58bn.
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The firm also increased its interim dividend to 7.2p per share, a touch higher than 7.1p last year.
Babcock’s chief executive, Archie Bethel, said the company’s Marine division had helped balance against the weakness in Aviation, with the former expected to deliver “stronger than expected trading” across the rest of the year.
As a result, Babcock retained its full-year underlying revenue guidance at around £4.9bn, alongside forecasts of an underlying profit of between £540-£560mln.
Bethel also said that the group’s order book had increased to over £18bn as a result of “significant contract wins” such as a deal with the Ministry of Defence to build its Type 31 warship for the Royal Navy as well as to provide training for London’s Metropolitan Police Service.
Overall, the CEO said the company’s combined order book and pipeline was over £34bn, “its highest level ever”.
Investors, however, were less than impressed by the in line performance, with the shares down 3.1% at 531.4p in early deals on Wednesday.