Strong order book lifts Babcock

Babcock International, which has a base in Batley, said work on the new 65,000-tonne aircraft carriers, submarine contracts in the UK and Canada and warship refit work in Australia helped lift revenues 9 per cent to £1.7bn in the six months to the end of September.

The engineer’s pre-tax profits grew 17 per cent to £141.7m and Babcock said its £12bn order book gives it confidence, despite a dip from £12.5bn a year earlier.

The group, which earns just over half its sales from the Ministry of Defence (MoD), said it is thriving as customers demand better value for money.

“We are well positioned in our markets to benefit from the ongoing economic climate of austerity and financial constraint,” it said.

Babcock said it is tracking “significant opportunities” which have not yet come to market, citing a £15.5bn bid pipeline.

It has set its sights on a contract to decommission Britain’s Magnox fleet of former nuclear power sites, worth between £4bn and £5bn. Babcock has joined forces with US firm Fluor for the bid, with a decision on the preferred bidder expected in March.

It is also hopeful of winning a 21-year deal to support London Fire Brigade’s vehicles.

BAE last week announced plans to axe 1,775 jobs across its shipyards and end shipbuilding at Portsmouth.

The defence giant blamed its decision on a lag between the peak of aircraft carrier work and starting construction on new Type 26 warships.