Babcock shares up on dividend return and profit jump

Shares in defence firm Babcock (LSE: BAB) rose over 1% on Tuesday after the company restarted dividend payments and reported a significantly higher first-half profit.

The London-based company 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 in Ukraine is now operating at full capacity.

After a four-year break, Babcock declared an interim dividend of 1.7 pence per share.

Chief Executive David Lockwood said the dividend reflects confidence, and full year expectations remain unchanged. He added that the company has made excellent operational and strategic progress.

Going forward, Babcock continues to expect organic revenue growth, margin expansion and positive cash flow this year. Over 90% of its 2024 revenue forecast is under contract.

Babcock shares are up 42% year-to-date and 45% year-over-year.