Babcock International reports higher revenue and profit in HY2026 results

Babcock International Group Plc (LON:BAB) has announced its half year results for the six months ended 30 September 2025.

Consistent delivery underpins growth and margin expansion

David Lockwood, Babcock International Group Chief Executive Officer, said:

“Thanks to the skills and dedication of our people, Babcock continued its track record of profitable growth with a strong performance in the first half. Good momentum was underpinned by consistent delivery for our customers against a background of supportive market dynamics.

“We are on track to achieve our expectations for the full year and are pursuing exciting opportunities for sustainable growth and margin expansion, both in the UK and internationally.”

Good performance in first half, full year expectations unchanged

•      Contract backlog: £9.9 billion, reflecting significant Land and Aviation orders in 2H25 (FY25: £10.4 billion)

•      Revenue: 7% organic growth driven by Nuclear, with lower volumes in Land Civil businesses

•      Statutory operating profit: up 27%, including derivative revaluation and recovery of loan granted on disposal

•      Underlying operating profit: up 19%, driven by strong performance in Nuclear and Marine

•      Underlying operating margin: up 90 basis points to 7.9%, with increases in all sectors

•      Underlying EPS: up 21% to 28.5p, reflecting higher underling operating profit and lower interest charge

•      Underlying free cash flow: £141 million, with underlying operating cash conversion of 83%

•      Net debt excluding leases reduced by £90 million to £56 million, a gearing ratio of 0.2x (FY25: 0.3x)

•      Interim dividend: up 25% to 2.5 pence per share (HY25: 2.0 pence)

Consistent delivery driving growth and margin expansion

•      On track to deliver FY26 target margin of 8% and medium-term target of >9%

•      The first of five Type 31 frigates completed float-off, while the third ship commenced its assembly phase

•      Re-opened Devonport’s 15 Dock facility, marking the return of twin streaming submarine maintenance capability

•      Successfully mobilised DSG, the follow-on £1.0 billion, five-year British Army vehicle support contract

•      Mobilisation of 17-year Mentor 2 military air training contract in France progressing to plan

Market dynamics supporting growth in UK and Internationally across defence and nuclear 

•      Secured £114 million three-year contract to prepare for the first nuclear defueling of a decommissioned Trafalgar Class submarine in over 20 years

•      Signed a teaming agreement with Patria to offer its 6×6 armoured personnel carrier to the UK Armed Forces

•      Over £50 million in new orders secured for Skynet services

•      Agreement with Hanwha Ocean to be In-Service Support partner on the Canadian Patrol Submarine Project 

•      MOU with HII to deliver autonomous launch and recovery of unmanned underwater vehicles 

•      Secured a first ever defence contract in South Africa, for submarine support

•      Awarded new 10-year contract alongside Airbus Helicopters to deliver in-service support to 46 new H145 helicopters for the French Government

Strong balance sheet and consistent cash generation underpins disciplined capital allocation with active pipeline of organic and inorganic opportunities

•      Ongoing buyback of £200 million in train – £49 million completed in the first half

•      Organic investment opportunities including further investment in our advanced manufacturing capabilities and shipbuilding capacity at our Rosyth facility

•      Assessing pipeline of inorganic investment opportunities in line with our disciplined M&A strategy

FY26 outlook

•      Our expectations for FY26 are unchanged. We expect to achieve an underlying operating margin of 8%, with good progress to towards the medium-term guidance we set in June 2025: average revenue growth of mid-single digit, underlying margin of at least 9%, and average underlying operating cash conversion of at least 80%.

See page 14 for segmental analysis 

Notes to statutory and underlying results on page 1

1.    Alternative Performance Measures (APMs):

The Group provides alternative performance measures (APMs), including underlying operating profit, underlying margin, underlying earnings per share, underlying operating cash flow, underlying free cash flow, net debt, net debt excluding leases and contract backlog, to enable users to have a more consistent view of the performance and earnings trends of the Group. These measures are considered to provide a consistent measure of business performance from year to year. They are used by management to assess operating performance and as a basis for forecasting and decision-making, as well as the planning and allocation of capital resources. They are also understood to be used by investors in analysing business performance.

The Group’s APMs are not defined by IFRS and are therefore considered to be non-GAAP measures. The measures may not be comparable to similar measures used by other companies, and they are not intended to be a substitute for, or superior to, measures defined under IFRS. The Group’s APMs are consistent with those for the year ended 31 March 2025. The Group has defined and outlined the purpose of its APMs in the Financial Glossary on page 25.

The person responsible for arranging for the release of this announcement on behalf of the Company is Jack Borrett, the Corporate Secretary, Babcock International

Results presentation:

A presentation for investors and analysts will be held on 21 November at 09:00 am (BST). The presentation will be webcast live and will be available on demand at www.babcockinternational.com/investors/results-and-presentations. A transcript of the presentation and Q&A will also be made available on our website.