Babcock shares rise as firm reveals healthy order book

Firm’s Rosyth site has assembled new aircraft carrier fleet

Shares in engineering giant Babcock rose strongly yesterday after the firm announced its revenues were on track to meet full-year expectations.

The company’s Rosyth base is one of the largest manufacturing and repair sites in the UK and has been the focus for the assembly of the Royal Navy’s new multibillion-pound aircraft carrier fleet.

The group announced that 89% of its revenue was in place for 2017/18 and around 57% for 2018/19.

The update said: “The order book and bid pipeline of opportunities have remained stable and continue to provide confidence in our ability to grow revenue as expected over the medium term.

“In our marine sector we have begun to work on the £360 million contract to be the technical authority and support partner for the Royal Navy’s new aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales, and Type 45 destroyers.”

The company said it had maintained a healthy financial position, adding that growth for the rest of the financial year was in line with its expectations.

The company has also secured a seven-year contract for the design, production and delivery of weapons handling and launch equipment for the South Korean Jangbogo III submarine.

It added that the publication earlier this month of the UK Government’s National Shipbuilding Strategy would create potential opportunities for Babcock and the wider UK supply chain.

The update added: “Revenue in the marine sector is expected to be slightly lower than in the previous financial year, due to the stepdown in the volumes from the Queen Elizabeth-class aircraft carrier programme and the phased introduction of contracts, but this is expected to be offset by growth in the other sectors.”

Shares in the company rose 46.50p to finish at 846.50p.

Picture: Getty Images. HMS Queen Elizabeth was built at Babcock’s Rosyth site.