Babcock International – deep into the dismantling of Dounreay nuclear reactor in Sutherland and the Dreadnought nuclear submarine programme – announced a dip in revenues to £4.47 billion from £4.65 billion, with profits before tax tumbling 39.9% to £235.2 million from £391 million, hit by exceptional costs related to pension issues.
However, underlying operating profit for the year was up 0.7% to £588 million and the company has reduced its new debt to £958 million, down £157 million. Underlying earnings per share are up 1.2% to 84p. The company has an order book and pipeline of work valued at £31 billion.
Chief Executive Archie Bethel said: “We have delivered a robust performance this year, operating profit is in line with our expectations, we have sustained our strong margins and we have improved our cash generation.’’
“More importantly for the delivery of our strategic goals and our future performance, we have sharpened our focus on our three key markets of defence, aerial emergency services and civil nuclear. We have strengthened our position in these areas with some important contract wins that partially offset the upcoming completion of the QEC contract and the loss of the Magnox contract and we have delivered further growth in our international businesses. In addition, we have exited low margin businesses outside of the three focus markets, which do not have synergy with the rest of the Group, and we have reshaped our oil and gas business,’’ he said.
“Net debt reduction in the year enhances our balance sheet strength and we have again increased the dividend. As we begin the new financial year we do not expect the wider market environment to be any less challenging than we have experienced this past year. “However, Babcock’s strength continues to be our focus, our position as a trusted partner in critical, complex areas of national importance, in both the UK and internationally, and our knowledge and expertise. The guidance we have issued today for the 2019/20 financial year reflects the market environment we face and the strengths we deploy in these markets.
Bethel said in the coming year Babcock will continue to build a stronger business platform and he thanked for their hard work this year and their commitment to the group.
