UK-based engineering support services company Babcock International Group plc (BAB.L) Tuesday reported 30% higher pre-tax profit for the half year ended September 30, citing good revenue growth in Marine and Defence sectors. Babcock also proposed a 20% higher interim dividend, and said it remains confident that full-year results will be in line with expectations.
Pre-tax profit increased 30% to GBP 66.1 million from GBP 50.9 million for the year-ago period.
Profit attributable to equity holders of the parent was GBP 53.0 million or 23.04 pence per share compared with GBP 27.5 million or 11.87 pence per share a year ago.
Earnings from continuing operations were GBP 53.0 million or 23.04 pence per share compared with GBP 40.8 million or 17.60 pence per share last year.
For the six months ended September 30, Babcock had acquired intangible amortization and other exceptional items of GBP 5.7 million compared with GBP 6.9 million last year.
Earnings before amortization and exceptionals were GBP 57.1 million or 24.83 pence per share compared with GBP 45.7 million or 19.73 pence per share last year. On an underlying basis, pre-tax profit rose 24% to GBP 71.8 million from GBP 57.8 million in 2008.
For the six months, total revenue was GBP 934.9 million compared with GBP 942.3 million for the same period last year.Group revenue, which excludes joint venture revenues, declined 2% to GBP 923.0 million from GBP 940.6 million a year ago.
Marine revenue increased to GBP 456.3 million from GBP 432.4 million, and Defence revenue rose to GBP 173.8 million from GBP 152.6 million last year.
Networks revenue rose slightly to GBP 66.2 million from GBP 65.1 million, while Nuclear revenue declined marginally to GBP 54.1 million from GBP 54.4 million last year.
Rail revenue fell sharply to GBP 84.8 million from GBP 113.7 million, and Engineering and Plant Services revenue decreased significantly to GBP 87.8 million from GBP 122.4 million a year ago.
Underlying operating profit rose 13% to GBP 81.8 million from GBP 72.5 million in 2008. The focus on delivering and sharing efficiency gains with customers, together with reduced losses in Rail, has increased Group operating margins to 8.9% compared with 7.7% last year, the company said.
The share of joint venture results not included in the group revenue from continuing operations totaled GBP 11.9 million, comprising Defence alone, compared with GBP 1.7 million a year ago, consisting of Defence revenue of GBP 1.2 million, Rail revenue GBP of 0.4 million, and Engineering and Plant Services revenues of GBP 0.1 million.
Babcock proposed an interim dividend of 4.80 pence per 60 pence ordinary share, a 20% increase over 4.00 pence per 60 pence ordinary share issued in 2008, payable on January 15, 2010 to shareholders registered on December 18, 2009.
Babcock said the first six months record order book was maintained at around GBP 6 billion with strong bid pipeline of around GBP 3.3 billion.
Chief Executive Peter Rogers said, "We consider the major markets in which we operate remain both attractive and resilient and provide the Group with strong long-term growth prospects. In addition, our order book and robust bid pipeline give us excellent long-term visibility."
Rogers added that fiscal 2009/10 continues to be another year of excellent progress for the Group and it remains confident that results for the full year will be in line with its expectations.
BAB.L is trading down 3.12% at 622.00 pence on the LSE.
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