Engineering services giant, Babcock International Group, has for the first time announced a record sum relating to its share buyback scheme, underpinned by increased investment in the defence industry which has helped to raise the group’s operating profit by more than 50 per cent.
In its preliminary results, issued today, Babcock reported an operating profit of nearly £364 million for the year ended 31 March 2025, up 51 per cent from £241.6 million the year prior, with organic revenue growth of 11 per cent at £4.8 billion (FY2024: £4.3 billion), primarily driven by strong growth in Nuclear and Marine sectors.
This includes a record order intake of more than 70 international Liquid Gas Equipment contracts worth approximately £430 million, up 43 per cent in the period, ongoing mechanical and electrical works packages at Hinkley Point C, as well as several multi-year land and air defence contracts.
While cash generated from its operations held relatively steady at £357.4 million, compared to £374.3 million in the previous financial year, group net debt was reduced by £110 million during the period to £101 million.
Babcock is currently managing a contract backlog worth £10.4 billion, across various markets, up from £10.3 billion in 2024.
And, for the first time in its history, the group has begun a £200 million share buyback programme due to the already strong performance recorded by the business in 2025, which will be released next year.
In the near term, bosses expect to achieve an underlying operating margin of 8 per cent in FY2026, one year earlier than anticipated.
“This is a new era for defence,” said Babcock chief executive, David Lockwood. “There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth.
“Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers.
“We look forward to continuing our track record of profitable growth, and to investing in the people and capabilities that will create value for all our stakeholders.”
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