News
Aerospace · Dividend · Earnings · Profit
Babcock International Group (BAB.L), a British aerospace company, reported a significant drop in fiscal 2026 profit before tax to £283.7 million from £329.1 million, despite higher revenues, while simultaneously increasing its annual dividend and reaffirming its future outlook, causing its shares to fall 4.11%.
The company's profit before tax declined to £283.7 million from £329.1 million in the prior year, with underlying profit before tax also falling to £267.2 million from £339.4 million. Earnings per share decreased to 41.3 pence from 48.0 pence.
This profit contraction occurred despite an 8 percent organic revenue growth, with total revenue reaching £5.18 billion, up from £4.83 billion, driven by strong performances in its Nuclear and Aviation segments. However, the contract backlog decreased to £9.8 billion from £10.4 billion.
Despite the profit decline, Babcock announced a higher final dividend of 5.0 pence per share, contributing to a total annual dividend of 7.5 pence, a 15 percent increase from the previous year. The company maintained its fiscal 2027 outlook, anticipating good progress with approximately 70 percent of revenue already under contract.
Furthermore, Babcock reaffirmed its medium-term guidance, projecting average mid-single digit organic revenue growth, an underlying operating margin of at least 9 percent, and average underlying operating cash conversion of at least 80 percent. CEO David Lockwood stated the company remains on track to deliver its medium-term guidance, building a high-quality pipeline of long-term growth opportunities.
Investors reacted negatively, with shares trading down 4.11 percent at 1,003.00 pence on the London Stock Exchange.