Defence conglomerate Babcock International has announced a substantial increase in profits for the first half of the financial year, bolstered by significant demand within the nuclear and marine sectors.
Strong Financial Performance
For the six-month period ending on 30 September, the FTSE-100 group saw its revenue climb to £2.5 billion, a marginal increase from the £2.4 billion reported a year earlier. More impressively, the company's underlying operating profit saw a robust 19% jump, reaching £201.1 million.
Basic earnings per share also experienced healthy growth, rising from 25.7 pence to 33.7 pence. Reflecting this strong performance, Babcock confirmed an interim dividend of 2.5 pence per share, which marks a 25% increase.
Strategic Positioning and Future Outlook
The company's contract backlog stood at a formidable £9.9 billion for the period, which it attributed to significant land and aviation orders secured in the latter half of 2025. In a further sign of financial health, net debt—excluding leases—was reduced by £90 million over the period to just £56 million.
David Lockwood, Chief Executive of Babcock, credited the company's success to its workforce. He stated, “Thanks to the skills and dedication of our people, Babcock continued its track record of profitable growth with a strong performance in the first half.”
He added that the firm is “on track to achieve our expectations for the full year” and is actively pursuing opportunities for sustainable growth both in the UK and internationally.
Confidence in Long-Term Growth
Babcock also provided an update on its £200 million share buyback programme, confirming that £49 million of the scheme had been executed by the end of September. The company reiterated its confidence in the current geopolitical climate, noting that its specialist capabilities continue to be highly relevant.
Looking ahead, Babcock said it expects to achieve an underlying operating margin of 8% for the 2026 financial year and reported making good progress towards the medium-term guidance it outlined in June. With a clear strategy and disciplined capital allocation, the defence giant is positioning itself for sustained, profitable growth.
