Babcock reports 16% profit hike

Engineer Babcock has reported a 16% rise in pre-tax profit on revenue of £3.2bn in its tenth consecutive year of growth.

In its results for the year to 31 March 2013 the firm reported revenue of £3.2bn, up 6% from £3.1bn last year.

It also reported its bid pipeline now stood at £15.5bn, up from £9.5bn in 2012.

Peter Rogers, chief executive of Babcock, hailed it as a “strong year” for the firm.

He said: “The very substantial expansion of our bid pipeline reflects the continued buoyancy of our markets - public and private sector, civil and defence, UK and overseas - as customers seek trusted suppliers to maintain or enhance service quality at lower cost.

“With our strong order book and financial base, we are well positioned for further strong progress this year.”

Babcock’s support services arm, which contains its operations in the nuclear and rail markets, reported revenue of £848m, up from £750m the previous year.

However, its operating margin fell to 9% from 10.6% the year before.

The firm said the current economic climate in the UK was both a challenge and an opportunity for the firm.

During the year the firm was appointed to oversee the decommissioning of Dounreay nuclear site.

In October 2012 Babcock signed a memorandum of understanding with Hitachi to support it in the development of its new nuclear power stations at Wylfa and Oldbury following its acquisition of Horizon Nuclear Power.

But Babcock’s defence arm saw revenue fall 3% to £709m, from £734m the previous year.

Though this was mainly due a reduction in training work which it does for the Ministry of Defence and completion of a number of equipment construction contracts in the previous year.