Shares in major engineering firm Babcock jumped on Tuesday after the firm reported a 30% increase in pre-tax profits in the last 12 months.
Revenues at the company increased by 6% to £3.02 billion in the year to March 31, with pre-tax profits climbing by almost a third from £173 million in the previous year to £224.6m in the financial year just closed.
Net debt was reduced during the year from £641.1m to £550.6m and the company has declared a 16% increase in its full-year dividend to 26.3p.
The only major blip in Babcock’s full-year returns was an 8% reduction in the overall order book down by £1bn to £12bn.
The company’s single largest customer is the UK Ministry of Defence, and its 1,700-strong Rosyth workforce is involved in the assembly of the first of two Queen Elizabeth class aircraft carriers.
The firm said significant progress had been made on the 65,000-tonne supercarrier in recent months and the vessel the largest ever commissioned for the Royal Navy would float for the first time next year.
“Over the last 12 months, our UK activities continue to include our activities on the QE class carrier project, where we play a key role in the management of the overall programme,” the firm said.
“With completion of the hull assembly phase on target for late autumn 2013, over 80% of the structure is now in place in the assembly dock at our facilities in Rosyth,” the firm said.
“Significant effort is being applied to outfitting the assembled ship with key electrical and mechanical systems.
“The next planned significant milestone is the flooding of the dock in mid-2014 when the ship will float for the first time.”
Babcock also said the MoD had completed public consultations at Rosyth and Devonport and both yards had been identified as sites which could be used as part of its Submarine Dismantling Programme.
The wider company’s marine and technology division saw revenues rise 10% in the year to £1.19bn, and operating profit increased by 16% to £156.3m.
Defence and security which has been hit by cost-cutting in MoD budgets saw turnover reduce by 9%, although operating profit in the period increased by 14% to £112.2m.
Support services sales were ahead by 17%, with operating profits up 4% at £91.2m, while the company’s international division saw operating profits climb by 28% to £24.7m, despite a 1% drawback on revenues to £278m.
Markets remained positive, with a number of long-term opportunities arising, and it expected financial year 2013/14 to bring further “strong progress” for the company.
Chief executive Peter Rogers said: “Babcock performed strongly last year, driven by our clear leadership in the growing markets for engineering support services.
“We generated good growth in underlying revenue and further improved our operational performance to deliver increases in operating margin, underlying earnings and shareholder value.
“The very substantial expansion of our bid pipeline reflects the continued buoyancy of our markets public and private sector, civil and defence, UK and overseas as customers seek trusted suppliers to maintain or enhance service quality at lower cost.
“With our strong order book and financial base, we are well positioned for further strong progress this year.”