REG - Babcock Intnl Group - AGM trading update

Babcock InternationalAnnouncement

Thu 07:00

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RNS Number : 7206A  Babcock International Group PLC  25 September 2025

25 September 2025

 

Babcock International Group PLC

AGM trading update

 

Continued positive momentum, full year expectations unchanged

 

Babcock International Group ("Babcock" or "the Group") provides a trading
update for the first five months of the financial year ahead of its Annual
General Meeting to be held at 11.00 am today.

Trading update to 31 August 2025

Trading in the first five months to 31 August 2025 has been encouraging, with
the Group delivering organic revenue growth and underlying operating margin
progress in line with the Board's expectations.

Strong growth in Nuclear, driven by civil nuclear projects and submarine
support, and Aviation, as a result of the ramp-up of the French Mentor 2
contract, and ongoing growth in Marine was partly offset by lower revenue in
Land, due to lower activity in the Rail business.

Overall, expectations for the full year remain unchanged and we continue to
progress towards the Group's medium-term guidance, which we upgraded in June
2025 to average revenue growth of mid-single digit, underlying operating
margin of at least 9% (previously at least 8%) and average operating cash
conversion of at least 80%.

Developments in the period

The macro environment remains supportive, and we continue to make good
strategic progress. In the period we welcomed the UK Government's Defence
Industrial Strategy, which strongly aligns with our capabilities.  Babcock's
business momentum has continued through the period with sustained delivery and
strategic progress to support future growth.

·      Type 31 frigate programme - in April we were awarded a c£65
million Capability Insertion Programme contract on a sole source basis. In
June, a major milestone was reached with float-off of the first ship, HMS
Venturer. The second ship, HMS Active, is on track to float-off before the end
of FY26.

 

·      Submarine disposal - in June we secured a £114 million contract
to support the first defueling of a decommissioned British nuclear submarine
in over 20 years. We will work with the UK Defence Nuclear Enterprise and
industry partners to prepare for the defuel of four decommissioned submarines
at our Devonport facility from 2026.

 

·      AUKUS - our joint venture with HII in Australia secured its first
contract to enhance Australia's supply chain capabilities in preparation for
delivery of the first three nuclear-powered submarines under the trilateral
partnership.

 

·      Australia - in September we signed a new AU$250 million, 8-year
follow-on contract with the Australian Border Force (ABF) to enhance maritime
security operations in the Torres Strait. The contract includes the delivery
of two mission modified Airbus H145 helicopters to the ABF, plus air crews and
ongoing maintenance over eight years.

 

·      New AI intelligence product - in September we launched our first
fully AI-powered communications intelligence product Nomad(TM) which provides
front-line military and security services with valuable intelligence in
real-time.

 

·      Significant industry partnerships - we announced collaborations
with leading global industry players, including: a Memorandum of Understanding
(MoU) with BAE Systems Bofurs to offer support for the Type 31's
 multi-purpose Bofurs guns; as UK build partner to Finnish armoured vehicle
company Patria following the UK MOD's arrangement to join the multinational
Common Armoured Vehicle System programme; as Hanwha Ocean's exclusive
in-service support partner for the new Canadian Patrol Submarine Project; as
HII's partner to deliver autonomous launch and recovery of Unmanned Underwater
Vehicles via submarine torpedo tubes and; an MoU with radio communications
equipment manufacturer KNL to offer next generation high frequency
communications support to armed forces across the land, sea and air domains.

 

·      Share buybacks - we have completed around 25% of the £200
million share buyback programme announced at our preliminary results on 25
June 2025. We expect the programme to conclude by the end of FY26.

 

·      Refinancing of the Revolving Credit Facility (RCF) - in July, we
successfully entered into a new RCF with ten banks which replaces the previous
financing facility of £775 million. The new committed debt facility, which is
valid for five years with 2 one-year extension options, will provide the Group
with access to borrowings of up to an aggregate amount of £600 million, with
an accordion option to increase this facility by up to £200 million at
lenders discretion.

Additionally, during the period we held the first two of a series of investor
events. These demonstrated potential for both our Marine Design and Build
business and our Cavendish Nuclear business to double revenues by 2030. Links
to the materials and event replays can be found on our website at
www.babcockinternational.com/investors

HY26 half year results

The Group's HY26 half year results will be published on 20 November 2025.

 

 

ENDS

 

For further information:

Andrew Gollan, Director of Investor Relations               +44
(0)7936 039004

Kate Hill, Group Head of Financial Communications      +44 (0)20 7355
5312

Harry Cameron/Camilla Cunningham, Teneo                  +44
(0)20 7353 4200

 

 

Certain statements in this announcement are forward-looking statements. Such
statements may relate to Babcock's business, strategy and plans. Statements
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These risks, uncertainties or assumptions could adversely affect the outcome
and financial effects of the plans and events described herein.
Forward-looking statements contained in this announcement regarding past
trends or activities should not be taken as a representation that such trends
or activities will continue in the future. Nor are they indicative of future
performance and Babcock's actual results of operations and financial condition
and the development of the industry and markets in which Babcock operates may
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because such statements relate to events and depend on circumstances that may
or may not occur in the future. Except as required by law, Babcock is under no
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statements contained herein or to correct any inaccuracies which may become
apparent in such forward-looking statements.

Forward-looking statements reflect Babcock's judgement at the time of
preparation of this announcement and are not intended to give any assurance as
to future results.

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