Babcock FY revenue rises but profit hit by frigate charge

Babcock’s fiscal-year results show higher revenue but profit pressure tied to a Royal Navy frigate contract charge. For the year ending March 31, revenue rose 8% to £5.18 billion, with particularly strong growth in Nuclear and Aviation. Underlying operating profit fell to £293 million from £363 million a year earlier because of a £140 million charge on the Type 31 contract with the Royal Navy. Excluding that charge, operating profit increased 19%. The company said the charge reflects higher-than-expected rework during outfitting of ship one and an updated estimate of the program’s completion cost. Babcock declared a full-year dividend of 7.5p per share, up 15%, and reported free cash flow rising to £262 million from £153 million, while net debt fell to £329 million from £373 million. CEO David Lockwood said the group remains on track with medium-term guidance amid an uncertain geopolitical backdrop.