Babcock International Group PLC (LSE) Results for the six months ended 30 September 2025

2025-11-21 · Stocks · QuoteReporter

The stocks discussed are traded on the London Stock Exchange (LSE). On 21 November 2025, Babcock International Group PLC announced its financial results for the six months ended 30 September 2025, highlighting significant growth and margin expansion.

For the period, Babcock reported a revenue increase to £2,538.6 million, up from £2,408.9 million in the same period the previous year, marking a 7% organic growth primarily driven by the Nuclear division. The statutory operating profit rose by 27% to £234.3 million, compared to £183.8 million in 2024. The underlying operating profit also saw a significant increase of 19%, reaching £201.1 million, up from £168.8 million, with the underlying operating margin improving by 90 basis points to 7.9%.

Basic earnings per share (EPS) increased to 33.7 pence from 25.7 pence, while the underlying EPS rose by 21% to 28.5 pence, reflecting the higher underlying operating profit and a lower interest charge. The interim dividend per share was increased by 25% to 2.5 pence, compared to 2.0 pence in the previous year, demonstrating the company’s commitment to returning value to shareholders.

Cash generation from operations improved significantly, with underlying free cash flow increasing by 48% to £140.6 million, up from £94.7 million. This was supported by an underlying operating cash conversion rate of 83%. Net debt, excluding leases, was reduced by £90 million to £55.8 million, resulting in a gearing ratio of 0.2x, down from 0.6x.

The company maintained a strong contract backlog of £9.9 billion, reflecting significant orders in the Land and Aviation sectors. Babcock’s strategic initiatives included the successful mobilization of the DSG contract for the British Army and the Mentor 2 military air training contract in France. The company also secured a £114 million contract for nuclear defueling and expanded its international presence with new defense contracts in South Africa and Canada.

Looking ahead, Babcock reaffirmed its full-year expectations for FY26, targeting an underlying operating margin of 8% and aiming for a medium-term margin of at least 9%. The company anticipates average revenue growth in the mid-single digits and continues to focus on sustainable growth and margin expansion both in the UK and internationally.

In summary, Babcock International Group PLC delivered a strong performance in the first half of FY26, with significant improvements in revenue, profit, and cash flow. The company remains on track to meet its full-year targets, supported by a robust contract backlog and strategic growth initiatives across its core markets.

Original Announcement

Title: Results for the six months ended 30 September 2025
Date: 2025-11-21
Source: London Stock Exchange