November 20, 2019 / 7:26 AM / 6 months ago

Buoyant warship division keeps Babcock on course for 2020 targets

LONDON (Reuters) - British engineer Babcock International (BAB.L) said it was on course to hit its full-year profit and revenue targets due to solid demand for support services across its UK warship division.

Babcock, whose biggest customer is Britain’s Ministry of Defence, is reshaping the group as the ending of a number of contracts eats into its expected income for the year ending March 31 2020.

The group said on Wednesday that when cutting out the impact of the so-called step downs, its first-half revenue was flat at 2.5 billion pounds ($3.2 billion) and the underlying operating profit slipped by 2%.

“Today’s results show we are doing what we said we would do,” Chief Executive Archie Bethel said.

“Our delivery in the first half is in line with our expectations, with good performance across most of the group. In particular, strong performance from our Marine business has offset some weakness in the Aviation sector.”

The group’s order book stood at 18 billion pounds boosted by a win in September of a major contract to design new Type 31 frigates as Britain seeks to revive its once-mighty shipbuilding industry.

Reporting by Kate Holton; editing by James Davey

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