Babcock International Group
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Babcock International Group (BAB) investor relations material

Babcock International Group H2 2026 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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H2 2026 earnings summary22 Jun, 2026

Executive summary

  • Delivered strong FY 2026 results, reaffirming medium-term guidance and highlighting differentiated defense and nuclear capabilities, with 80% of revenue from these sectors.

  • Leadership transition underway, with Harry Holt set to succeed David Lockwood as CEO, ensuring continuity and strategic momentum.

  • Strategic momentum supported by disciplined capital allocation and targeted investment, increasing shareholder returns.

Financial highlights

  • Organic revenue grew 8% year-over-year to £5.2bn, with underlying operating profit up 19% to £433m and EPS up 20%.

  • Operating profit margin improved by 70bps to 8.2% (excluding Type 31 charge); cash conversion at 84%, delivering £262m in free cash flow.

  • Dividend increased by 15% to 7.5p; £200m share buyback completed post year-end, with another £200m announced for FY27.

  • Net debt reduced to £23m, leverage at 0.2x, and BBB+ credit rating retained.

  • Type 31 program incurred a £140m charge due to higher-than-expected rectification costs, absorbed within medium-term guidance.

Outlook and guidance

  • Reaffirmed medium-term guidance: mid-single digit organic revenue growth, 9%+ margins, and 80%+ operating cash conversion.

  • FY 2027 revenue visibility at 70% as of April 1, with expectation to reach 90% under contract by half-year.

  • Strong medium and long-term opportunity set, aligned to structural growth in defense and nuclear markets.

  • Strategic priorities include operational performance, talent management, and disciplined capital allocation.

Detail Type 31 rework costs and contingency
FMSP renewal timeline and political risks
Rosyth capacity for US Virginia-class build
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