Revenue up but profits down for Babcock International

The company posted revenue of £4.4bn during the year to March, which was up 8 per cent on the previous 12 months.

But statutory operating profit was £45.5 million, down from £226.8m, for the aerospace, defence and security group, which includes the Defence Support Group operation at MoD Donnington in Telford and the Babcock Vehicle Engineering specialist vehicle conversions business at Aldridge.

Babcock said it had taken a £100.1m hit from a contract to build Type 31 frigates for the Royal Navy over a dispute about costs.

David Lockwood, Chief Executive Officer, said: "We've made excellent progress this year, with better-than-expected cash generation, margin expansion and double-digit revenue growth.

"When we started our transformation, my first goal was to stabilise and strengthen the balance sheet and I'm delighted to say that work is complete. Babcock is now a higher-quality, lower-risk and more predictable business, with a clear focus on execution.

"In a world of significant instability, national security has never been more important. With defence making up two-thirds of the Group, the combination of capability, availability and affordability we offer is increasingly relevant.

"I'm excited by the momentum building across the business, and that confidence is reflected in our expectation of continuing cash-backed profitable growth, and reintroducing a dividend in FY24."