Defence contractor Babcock International Group has reported a contract backlog of £9.9bn for the first half of fiscal 2026 (HY26), up 4% from £9.5bn in the same period of the previous fiscal.
During the period ended 30 September 2025, the company achieved a 7% organic revenue growth, reaching £2.5bn, compared to £2.4bn in the prior year.
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The company attributed this growth to the nuclear, aviation, and marine segments.
Babcock delivered operating profit of £234.3m in H1 FY26, up from £183.8m in H1 FY25.
The underlying operating profit rose by 19% to £201.1m, up from £168.8m, with the operating margin increased by 90 basis points to 7.9% in HY26 from 7.0%.
The Marine division’s revenue increased by 6% due to higher volumes in the Liquid Gas Equipment business and the Skynet programme, while Nuclear division saw a 14% revenue growth, benefiting from the Future Maritime Support Programme.
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By GlobalDataBabcock reported a reduction in net debt to £351.1m in HY25, a decrease of £34.5m from the previous year’s £385.6m, attributed to strong free cash flow generation.
The interim dividend was increased by 25% to 2.5p per share, up from 2.0p.
In the defence sector, Babcock completed the float-off of the first Type 31 frigate, HMS Venturer, and commenced assembly of the third frigate, HMS Formidable.
The company also delivered nine missile tubes for the US Columbia Class submarine programme over nine months.
Internationally, Babcock secured a £114m contract for nuclear submarine defueling and a new ten-year contract with Airbus Helicopters for in-service support of 46 H145 helicopters for the French Government.
Babcock CEO David Lockwood said: “Thanks to the skills and dedication of our people, Babcock continued its track record of profitable growth with a strong performance in the first half. Good momentum was underpinned by consistent delivery for our customers against a background of supportive market dynamics.”
The company maintained its forecast for FY26, anticipating an underlying operating margin of 8%.
Additionally, Babcock predicts an average revenue growth in the mid-single digits and an underlying margin of at least 9%.
“We are on track to achieve our expectations for the full year and are pursuing exciting opportunities for sustainable growth and margin expansion, both in the UK and internationally,” David Lockwood added.
