Babcock International Group PLC ("Babcock" or "the Group") provides an update on trading for the nine months of the financial year ending 31 March 2025 and upgrade of full year expectations.
The strong trading performance reported at HY25 continued throughout the third quarter of the year, and the preliminary view of performance in the month of January is also encouraging.
The majority of revenue for the year is now under contract and, having reviewed the delivery forecast for the remainder of the year, the Board now expects both revenue and underlying operating profit to exceed the top end of the range of analyst expectations1. Accordingly, we are upgrading our expectations for FY25 to c.£4.9 billion of revenue, with the expected overperformance due to double-digit organic growth in Nuclear and strong growth in Marine.
In Nuclear, growth is driven by increased new build and decommissioning work in civil nuclear, as well as increased submarine support activity and higher than originally expected infrastructure revenues. In Marine, the growth is enhanced by higher LGE volumes as well as the ramp-up of the Skynet programme.
Babcock Chief Executive David Lockwood said: "Today's announcement demonstrates that successful execution of our strategy is continuing to deliver value for all our stakeholders. Our engineering skills and know-how are in ever greater demand and with significant opportunities before us, I look forward to further profitable growth."
Operational momentum
We continue to make good operational and strategic progress in the UK and internationally.
In January, HMS VICTORIOUS entered our 9-Dock facility in Devonport, marking a major milestone in the £560 million programme to modernise and refit the submarine. HMS VICTORIOUS is the second of the UK's four Vanguard Class submarines, which play a vital role as part of the UK's continuous at sea deterrent, to undergo a life extension programme. Moving the submarine into the dock enables us to deliver the work required to return this critical national defence asset back to the Royal Navy to continue operational patrols into the 2030s.
We are progressing the build of the first three ships in the Type 31 Inspiration Class frigate programme. We expect the float-off of the first ship, HMS Venturer, to be in the first half of FY26 and float-off of the second ship, HMS Active, in the second half of FY26.
In January, we were awarded a new 17-year contract (Mentor 2) by the Direction Générale de l'Armement for the provision and support of military air training solutions for the French Air and Space Force and the French Navy. The contract, worth up to c.€800 million, including c.€200 million of options, comprises the provision of aircraft, simulators and initial pilot training as well as the through-life support of the aircraft, and infrastructure2. This agreement represents a significant expansion of our military activity in France, one of our focus countries.
