(Corrects surname of CEO to Rogers)
By Li-mei Hoang
LONDON May 19 British engineering contractor
Babcock said on Monday it was confident about its
prospects for the year ahead after it posted a 15-percent rise
in annual profits and raised its dividend.
The 123-year-old defence, support services and engineering
contractor said it expected to make strong progress in its new
financial year and would see significant growth from its
acquisition of helicopter transport firm Avincis.
It also said it saw a buoyant market for its nuclear,
defence and marine businesses.
"It was more of a decent year. The growth we got was pretty
broad-based, the organic growth was good and to add to that, the
acquisitions we made, I think that it is a decent picture," CEO
Peter Rogers told Reuters.
Babcock, which generates more than half of its revenue from
the Ministry of Defence (MoD), has profited over the past year
as military and engineering clients, under pressure from tighter
government budgets, outsourced work to cut costs.
It has also avoided scandals that have hit some of its
biggest outsourcing rivals such as Serco and G4S
The company was awarded a 7-billion pound contract,
alongside U.S. group Fluor, to manage the decommissioning of
nearly half of Britain's nuclear sites - one of the largest UK
government contracts ever put out to tender.
Rogers said Babcock was still considering bidding to buy the
MoD's military equipment maintenance arm, which Jefferies
analysts said could generate 3 billion pounds in revenue over 10
Babcock said revenue grew 9 percent to 3.5 billion pounds
($5.89 billion) and its bid pipeline stood at 17.5 billion.
Pretax profit rose to 316.1 million pounds from 275 million
and beat the 305.56 million expected by analysts polled by
Reuters. It also raised its full-year dividend by 14 percent to
16.4 pence per share.
Shares in Babcock were down 0.8 percent to 1178 pence at
"Babcock has delivered a solid set of results, which are
slightly ahead of our forecasts across the board," said Panmure
Research analyst Mike Allen.
($1 = 0.5942 British Pounds)
(Reporting by Li-mei Hoang; editing by Jason Neely)