Babcock International Group PLC on Tuesday reinstated dividend payments as it reported a significantly higher first-half profit.

The London-based aerospace and defence firm said in the six months to September 30, pretax profit jumped to £136.1 million from £51.2 million a year prior.

Revenue climbed 1.5% to £2.18 billion from £2.14 billion. The company noted that its contract to support UK-gifted platforms to Ukraine are now operating at full capacity.

Notably, net finance costs halved to £14.1 million from £28.2 million, but net income tax expense increased to £32.0 million from £14.2 million.

After a four-year hiatus, the company declared an interim dividend of 1.7 pence per share.

Chief Executive Officer David Lockwood said: ‘We have a clear capital allocation policy, which is providing the group with the flexibility it needs to capture the growing number of value creation opportunities we see ahead. We are reinstating our dividend following a four-year hiatus, reflecting our confidence in the future, and our expectations for the full year remain unchanged.’

He added: ‘Beyond the strong financial performance in the half, we have also made excellent operational and strategic progress, delivering on existing contract milestones and entering into some significant long-term partnerships, such as our wide-ranging strategic cooperation agreement with Saab, which includes the development of an advanced corvette design and an agreement with Huntington Ingalls Industries to collaborate in naval and nuclear opportunities in the UK, US and Australia.’

Looking ahead, the company ‘for another year’ continues to expect organic revenue growth, underlying operating margin expansion and positive cash flow.

Babcock said over 90% of financial 2024 forecast revenue was under contract at the end of September, entering the second financial half with good momentum.

Babcock shares rose 1.4% to 415.40 pence each on Tuesday morning in London.

Copyright 2023 Alliance News Ltd. All Rights Reserved.