Multinational support services group Babcock is on course to hit full year financial targets after delivering a 7% increase in half year profits.
The company – which is working with Alliance partners to deliver the UK’s new flagship fleet of Queen Elizabeth Class aircraft carriers at its marine services base at Rosyth – also saw revenues rise by 6% to £2.49 billion in the six months to September 30.
It declared a half year dividend of 6.5pence, up 7% on the year previous.
Babcock said its £20bn order gave it “excellent visibility of future revenues” and it said it expected to continue to grow in the UK despite “broader uncertainties.”
It said the fundamentals of the business were unchanged following Brexit and the “vast majority of the group’s operations in Scotland” would be unaffected if the country was to eventually become independent through a second referendum.
Babcok is involved in a significant range of defence and civil works in the UK and overseas.
The marine and technology business generated revenues of £838.8m in the period under review, up 6% on 2015.
The company highlighted the importance of Rosyth to that outcome.
It said the aircraft carrier project remained “strategically important” to the group with the programme remaining on schedule.
The company said work was now focused on systems commissioning and harbour trials for the first carrier, while the second ship was now “consolidated to her full length” in dry dock.
In June, Rosyth also took in the submarine to be used in the Ministry of Defence’s demonstration dismantling project – a stay that has been extended until work to remove low level waste begins.
Additionally in the period, Rosyth beat off competition from two American companies to secure a multi-million pound contract to manufacture 22 tactical missile assemblies for General Dynamics Electric Boat.
Chief Executive Archie Bethel said he expected Babcock to make good progress both this year and beyond.
“Babcock continues to perform; delivering growth in revenue, profit and earnings, and maintaining healthy levels of cash generation and conversion,” Mr Bethel said.
“The long-term visibility provided by our £20 billion order book and substantial pipeline of opportunities underpins our future growth.
“Our UK markets remain positive, with the group well positioned for the significant future outsourcing opportunities expected from both our defence and civil customers, and we see growing international demand for our specialist and complex engineering support services.
“Despite slightly slower organic growth, the board expects the full-year results to be in line with its expectations.”