Babcock International told markets that trading had been “encouraging” in the first five months of the year thanks to growth in its nuclear division.
In a trading update released ahead of the firm’s annual general meeting, Babcock said trading has been in line with the board’s expectations.
“Positive momentum has continued into H1, and the group has delivered good organic revenue growth, particularly in civil and naval nuclear, and in the land sector,” the firm said.
The FTSE 250 defence firm said that underlying operating profit had increased compared to the same period last year even though last year included the licence fees from the Polish MIECZNIK programme.
“Our expectations for the full year are unchanged and we continue to progress toward our medium-term guidance,” Babcock said.
The firm said that demand in its core market remained positive and that it was making “good strategic progress”.
In the period, Babcock reported that it had launched H&B Defence with HII to accelerate the development of Australia’s AUKUS nuclear-powered submarine programme. It also reopened 9 Dock in Devonport last week, which will extend the life of HMS Victorious, one of the UK’s nuclear submarines.
Babcock’s full year results, released in July, revealed a big boost from an increase to defence spending globally. Underlying operating profit increased 34 per cent in the year to March, the firm reported.
“Babcock is well positioned to benefit from the sustained uplift in global defence budgets, driven by the need to recapitalise, re-equip and modernise militaries,” chief executive David Lockwood said at the time.