Revenue and profits fall for Babcock

Revenue for the company, includes the Defence Support Group operation at MoD Donnington, in Telford, and the former Macneillie specialist vehicle conversions business at Aldridge, now renamed Babcock Vehicle Engineering, was also down for the half year by 2.7 per cent to £2.25 billion.

The group has a £32bn combined order book and bid pipeline with 92 pe cent of underlying revenue already secured for 2018-2019

It has signed a 'Joint Ways of Working Charter' partnership agreement with the UK Government and Ministry of Defence which has added around £650 million of MOD work to the order book

Chief executive Archie Bethel said: "We had a solid first half with underlying results in line with our expectations and we have confirmed guidance for the full year. We are taking decisive actions to further strengthen the group which will deliver benefits next year and beyond.

"We increased earnings per share, achieved strong cash generation and maintained a strong balance sheet, having reduced net debt by £160 million over the last12 months. We grew our combined order book and pipeline and continued our international expansion. Following this performance and reflecting our confidence in our prospects, we are maintaining our track record of increasing our dividend."

Mr Bethel said that the outlook for the full year remains unchanged.

"Revenue growth will resume in the second half and for the year as a whole, we continue to expect low single digit underlying organic revenue growth at constant currency with improved margins. We will continue to reduce net debt and focus on delivering value to our shareholders, partly through a growing and sustainable dividend. We have excellent opportunities both in the UK and internationally to build on our strengths and I am determined to build on them," he added.

Last year Babcock realigned its business into four sectors: marine, land, aviation and Cavendish Nuclear.