Babcock International Group PLC
19 July 2005
Date: 19 July 2005
Babcock International Group PLC
Annual General Meeting 2005
Chairman's Statement
The following is the text of the statement being made by the Chairman of Babcock
International Group PLC at its Annual General Meeting being held today,
19th July 2005, starting at 11:30 am.
'The Babcock strategy during the last 5 years has been to transform the company
from an engineering conglomerate into a support services business. This was
firstly in the defence sector, but it was always the intention to broaden the
market spread to give a better balance. This was achieved with the acquisition
of the Peterhouse Group in June 2004. The last 12 months have been
predominantly occupied with the integration of the Peterhouse businesses into
the Babcock Group.
This resulted in the profits before tax (pre goodwill and exceptional items) to
31st March 2005, increasing by 52% over the previous year. Not all of this
increase, however, came as a consequence of the acquisition and the operating
profit for the original Babcock businesses increased by 18%.
We continue to win new contracts and in the last few months have been named as
preferred bidder for the Royal School of Military Engineering and for the
Eastern Regional Prime contracts. The latter is particularly satisfying since
we bought the SGI business in 2003 for £26 million and this business should have
a turnover in the next financial year in excess of £120 million. We also
secured a 5-year extension to the Faslane contract, and this morning we
announced the winning of further contracts from Network Rail for high output
track renewals and signalling works worth in total over £200m. These orders
highlight the strong position and excellent prospects of our rail business. The
order book now stands in excess of £2 billion, and trading is in line with our
expectations at the time of the preliminary statement.
Over the 5 years to March 2005 an investment in Babcock has outperformed an
investment in the All Share Index (excluding investment trusts) by 124% and that
figure would be nearly 143% if we took the 5 years to the end of June.
I am also pleased to confirm that on Friday 15th July Babcock was officially
admitted to the FTSE 250 index, a further recognition of our transformation.
The Board has been conscious that throughout a period of such dramatic change
one key priority has been to maintain a secure financial position. However,
with the larger and more broadly based group the Board is now recommending a
final dividend of 2.65 pence per share giving a total for the year of 4 pence
per share which is an increase over the previous year of 19.4%. Over the medium
term, we intend to target dividend cover based on full year earnings, excluding
goodwill and exceptional items, in the range of 2.5 - 3 times.'
- Ends -
Babcock International Group PLC
Peter Rogers, Chief Executive 020 7291 5000
Financial Dynamics
Richard Mountain 020 7269 7291
This information is provided by RNS
The company news service from the London Stock Exchange D
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