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Babcock International Group PLC on Thursday said it swung to an annual profit as its contract backlog grew, citing governments prioritising defence and national security in the wake of Russia's invasion of Ukraine.
In the financial year that ended March 31, Babcock swung to a pretax profit of £182.3 million from a loss of £1.81 billion a year before.
Revenue grew 3.3% to £4.10 billion from £3.97 billion. The contract backlog was up 21% at £9.9 billion from £8.2 billion in financial year 2021.
The London-based aerospace, defence and nuclear engineering services company declared no dividend for the financial year.
‘The tragic conflict unfolding in Ukraine has created significant additional geopolitical volatility and governments have reprioritised defence and national security. In the short term, opportunities are emerging for our defence support capabilities, driven by the need for force readiness,’ Babcock said.
It added: ‘Outside of wage inflation, in many of our markets the recent increase in input-cost inflation coupled with shortages of supply, has increased the cost, and in some areas the availability, of materials and components. In such an environment, supplier resilience is also an emerging risk. Our newly formed Procurement & Supply Chain organisation is monitoring our supply chain to identify and mitigate any such issues as early as possible.’
Babcock shares were 0.2% higher at 344.40 pence each in London on Thursday afternoon.
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