Babock profits take off with new contract

Published on Tuesday 11 November 2008 08:44

THE operator of Rosyth Dockyard has unveiled strong growth in revenues and profits as it continues to enjoy a "strong" position following major contract wins.

Babcock International said underlying pre-tax profits had increased by 33 per cent to 57.8 million in the six months to the end of September, while revenues surged by 40 per cent to 940.6m.

Earlier this year, the company won a major new contract to build two new super aircraft carriers for the Ministry of Defence – the biggest and most powerful warships ever constructed in the UK.

The carriers are to be constructed in sections in shipyards at Portsmouth, Barrow-in-Furness and Glasgow, with final assembly at Rosyth. It is estimated that hundreds of jobs will be created at Rosyth as a result.

Babcock said today that construction work to equip Rosyth's docks and caissons for the project was continuing.

Construction of the first blocks to be built by Babcock is due to start this month.

Peter Rogers, Babcock's chief executive, said: "We have continued to demonstrate the strength of our business model by delivering another set of record results.

"The market sectors in which we operate remain attractive with good growth prospects. Overall trading conditions across the group remain strong and the major contracts signed in the first half provide good long-term visibility."

He said the board was to increase its interim dividend to 4p from 3.3p, reflecting its "confidence in the group's prospects and our commitment to shareholder value".

He added: "We remain confident that this will be another year of excellent progress."

Babcock's order book now stands at 5.2 billion and it said the pipeline of available opportunities remained "extensive".

Its marine division profits surged by 45 per cent to 42.2m

while in defence, profits increased by four per cent to 14.1m.

Rail revenues increased by 15 per cent to 113.7m, while nuclear profits were ahead by 103 per cent at 6.7m.

Looking ahead, the company said: "The market sectors in which we operate remain attractive with good growth prospects.

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