Babcock International (LSE: BAB) — the engineering support services company, with clients in the defence, energy, telecommunications, transport and education sectors — released its half year-report to 30 September 2013 this morning, which it described as “excellent financial results”, but its share price is currently down just over 1%, suggesting the good news was more than priced in.
There was a 9% rise in underlying revenue, to £1.7bn, growth of 9% in operating profit, up to £172.8m, and a 17% increase in pre-tax profit, up to £141.7m.
Underlying basic earnings per share rose 13%, to 31.6p, and the board has increased the half-year dividend by 10%, to 6.9p per share, which its says reflects its “confidence in future growth prospects“.
Babcock’s order book stands unchanged from 6 months ago, at £12bn, as does its order pipeline, at £15.5bn, but the company says it has “excellent visibility” of its future revenue stream and that “significant long-term growth opportunities” are being progressed
Commenting on the results, Chief Executive Peter Rogers said:
“Babcock performed well in the first half of the year. We delivered strong growth in revenue and profit with all our divisions moving ahead and fuelling further increases in shareholder value. The continued buoyancy of our order book and bid pipeline reflects both the strength of our markets, where budget-constrained public and private sector customers demand suppliers that can deliver maintained or enhanced value-for-money solutions, and our clear leadership of the UK engineering support services industry.
“We have excellent revenue visibility and our business model, operational scale, wide-ranging experience, track record and powerful balance sheet mean that we are well placed to generate further growth this year and in the longer-term future.“
At its current 1,277p Babcock’s share price is up close to 33% so far in 2013, and 233% over the past five years.
