Babcock hikes dividend in wake of higher profits

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Defence and engineering contractor Babcock International today said shareholders were in line for a 14 per cent increase in their dividend after it posted a rise in full-year profits.

The group, which recently struck a £920 million deal to buy search and rescue helicopter operator Avincis, said pre-tax profits for the year to the end of March grew 15 per cent to £316.1 million, on revenues 9 per cent higher at £3.55 billion.

Babcock reiterated its warning, first made in March, that the company would be faced with “potential adverse consequences” if voters opt for Scottish independence in September’s referendum. Risks include the inability to win contracts for the Royal Navy at Rosyth and a reduction in demand for helicopter services due to less investment in the North Sea.

Nevertheless, chief executive Peter Rogers said: “Our markets remain buoyant and we enter the new financial year with a powerful platform for further growth in the UK and overseas.”

The board proposed a final dividend of 16.4p a share, to be paid on 12 August – an increase of 14 per cent on last year’s payout. That would take the total dividend for the year to 21.4p, up from 19p last time.