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Babcock International Shares Slide as Fiscal 2026 Profit Drops

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Babcock International Shares Slide as Fiscal 2026 Profit Drops

Shares in Babcock International Group (BAB.L) fell early Monday morning after the British defense company posted a year-over-year decline in fiscal 2026 profit.

Attributable profit for the 12 months ended March 31 decreased to 211.2 million pounds sterling from 247.1 million pounds a year earlier. EPS slipped to 0.413 pound from 0.48 pound.

The company's shares were down over 4% in early morning trading in London.

Revenue rose to 5.18 billion pounds from 4.83 billion pounds in the last year. Meanwhile, underlying operating profit dropped 19% to 293.3 million pounds, largely due to a charge of 140 million pounds on its Type 31 frigate program.

The board proposed a final dividend of 0.05 pound per share, compared with 0.045 pound per share a year ago. This takes the full-year dividend to 0.075 pound per share, up from 0.065 pound per share a year ago.

Looking ahead, the company reiterated its medium-term guidance of average mid-single digit organic revenue growth and an underlying operating margin of at least 9%. It expects fiscal 2027 to be "another year of good progress," with 70% of the revenue visible under contracts as of April 1, 2026.

Chief Executive David Lockwood said, "Against an increasingly uncertain geopolitical backdrop, Babcock has delivered continued strategic and operational progress. We achieved strong underlying growth, improved margins and robust cash generation, while securing important contract wins that further strengthen our position in defence and nuclear markets, where long-term demand is increasingly structural."

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