Babcock International Group PLC

BAB

Equity

ISIN GB0009697037 / Valor 1142141

LSE London Stock Exchange, SETS (2026-08-07)

GBP 11.87-0.29%

Babcock International Group PLC
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About company

Babcock International Group PLC is a multinational company specializing in defense, aerospace, and security services, with a strong presence in the UK, Australasia, Canada, France, and South Africa. The company focuses on delivering engineering, support, and critical systems to both defense and civil markets, as well as designing and manufacturing specialist equipment such as naval ship systems and liquid gas handling systems. Babcock also offers integrated technology solutions in areas like secure communications, electronic warfare, and air defense. With a workforce of 26,000 employees, the company provides through-life technical and engineering support to improve performance, availability, and program cost for defense and civil customers, including naval, land, air, and nuclear operations.

Summarized from source with an LLMView SourceSector: Industrials

Headline numbers

Statutory revenue £5,177.7m; statutory operating profit £305.1m; basic EPS 42.1p. Underlying operating profit £293.3m and underlying EPS 39.6p for FY26.

Type 31 programme impact

Babcock recognised a £140.0m Type 31 contract charge in FY26 (includes a £95.5m revenue reversal). Excluding the Type 31 charge, underlying operating profit rises to £433.3m, underlying margin to 8.2% and underlying EPS to 60.5p.

Underlying performance and margins

Reported underlying operating margin was 5.7% (8.2% ex-Type 31). Revenue grew c.8% organically, driven by Nuclear and Aviation; all four sectors improved margins excluding the Type 31 impact.

Cash generation and balance sheet

Underlying free cash flow increased 71% to £261.8m; underlying operating cash conversion 119% (84% excluding Type 31). Net debt reduced to £329.0m (net debt excluding leases £22.7m); covenant net debt/EBITDA 0.2x.

Capital allocation & returns

Recommended full year dividend up 15% to 7.5p per share; completed a £200m buyback in April 2026 and announced a further £200m buyback expected in FY27.

Contract backlog, wins and strategy

Contract backlog £9.8bn. Major strategic progress: Indonesia Maritime Partnership Programme (up to £4bn), expanded HII partnership (support for US Virginia Class), Owners Engineer role for UK SMR programme, and other international defence/nuclear opportunities.

Outlook and guidance

FY27 expectations unchanged. Medium-term guidance reaffirmed: average mid-single-digit organic revenue growth, underlying operating margin of at least 9% and average underlying operating cash conversion of at least 80%.

Summarized from source with an LLMView Source

Key figures

25.2%1Y

214%3Y

313%5Y

Performance

35.2%1Y

33.1%3Y

32.8%5Y

Volatility