Trading Update

Babcock International Group PLC
28 September 2006

                                                               28 September 2006





                        BABCOCK INTERNATIONAL GROUP PLC



                                TRADING UPDATE



In accordance with its normal practice, Babcock International Group PLC ('
Babcock' or 'the Group') makes the following trading statement in advance of its
interim results for the six months ending 30 September 2006.



Babcock has had another strong six months and trading continues in line with the
Group's expectations at the time of the AGM Statement in July 2006.



Operations



With the Regional Prime East contract for Defence Estates successfully mobilised
and operating well and the Prime South West contract in its third year, growth
in Defence Services has been good.  All contracts in this division continue to
perform well.  We continue to make good progress on RSME and Ministry of Defence
(MoD) approval is scheduled for the first quarter of next year.  If approved
this contract would add approximately £30 million per annum to Defence Services'
turnover.  The announcement of preferred bidder for Defence Training
Review, package 2 is expected in November this year.



In Engineering and Plant Services our South African operations continue to enjoy
strong demand in all their markets, particularly the equipment market, where
currently growth is constrained only by availability of plant.  The increase in
expenditure on infrastructure programmes in South Africa will continue to
support growth in both the equipment business and the engineering services
business, where major bids are being prepared for new power generation capacity
for Eskom, the South African power utility.  Some weakening of the Rand during
the first half will dilute the full impact of this strong underlying performance
on translation into the Group's consolidated interim result.



Activity levels in Rail have continued to improve and the business was
successful in September in securing preferred bidder status on two out of the
six signalling strategic framework contracts recently tendered by Network Rail.
These contracts are expected to be worth approximately £100 million over 5
years. We are delighted to be working in partnership with Network Rail to renew
their assets. As reported at the full year, a programme of rationalisation has
started in Rail to improve operating margins and bring them within a range
acceptable to the Group.  Some further costs associated with this programme will
be incurred in the first half-year with the final tranche charged during the
second half.  Whilst margins in the first half-year remain below expectations,
the full benefits of the rationalisation should be seen in the financial year
2007/08 and beyond.



Activity levels in Networks on high-voltage transmission line refurbishment for
National Grid plc have been high and we are optimistic of securing significant
contracts for execution during the normally quiet winter period.  Our joint
tender with Amec PLC and Mott McDonald for the National Grid alliancing
contracts for the future support of the transmission network is in the course of
adjudication and we expect the announcement of preferred bidder next month.  In
the mobile telecoms business, slow release of infrastructure work by the major
service providers has temporarily delayed progress but we anticipate a return to
normal levels of activity during the course of next year.





In Technical Services, the warship refit operations at Rosyth have, as expected,
reached historically low levels of activity.  However, with an ongoing programme
of cost reductions in place and the prospect of a stable and sustainable
workload under the MoD Maritime Industrial Strategy, the outlook is brighter for
2007 and beyond.  In this regard, the MoD has recently confirmed to industry the
start of the refit periods for five warships during the second half of the
current financial year together with the regeneration of three vessels prior to
disposal in FY 2007.  We continue to explore ways of delivering further value to
the MoD in Naval surface ship and submarine support.



Progress towards main-gate approval by the MoD at the end of this calendar year
for the construction phase of the new aircraft carriers (CVF) is on track.
Demand for design services, including our work on the CVF project, has remained
strong throughout the period.  In nuclear, we have been short-listed to manage
and operate the low-level waste repository at Drigg for the Nuclear
Decommissioning Authority; an announcement of preferred bidder is expected in
mid-2007.  This encouraging news is a clear indicator that the strategy of
expanding our nuclear services into the civil market through the acquisition of
Alstec will allow Babcock access to this rapidly growing area.



Acquisitions



Both our recent acquisitions, Alstec and Powerlines, continue to perform ahead
of planning assumptions and we believe significant new opportunities exist for
both businesses.



Alstec, acquired in May, has made an encouraging start.  The acquisition brings
new opportunities in two major growth markets - nuclear decommissioning and
airport management - and strengthens Babcock's existing position in the
maintenance of submarines and surface ships as well as on the new aircraft
carrier programme.


The South African Powerlines business acquired in June has seen high levels of
demand from its principal customer Eskom in the first few months under Babcock's
ownership.  We are confident that given the significant capital investment
required in the high voltage infrastructure in South Africa over the coming
years, growth will remain strong in this business.



Summary



The trading environment for Babcock's businesses remains excellent.  Our order
book continues to be strong and is currently in excess of £2.3 billion.  We
believe Babcock's markets offer significant organic growth opportunities and we
continue to look to acquire businesses in the technically sophisticated area of
support services in which we operate.



Babcock will announce its interim results on 14 November 2006.



                                    - Ends -



Enquiries:


Babcock International Group PLC                                  020 7291 5000
Peter Rogers (Chief Executive)
Bill Tame (Finance Director)

Financial Dynamics                                               020 7269 7121
Andrew Lorenz / Susanne Walker








Notes to editors:



About Babcock International Group PLC



Babcock International Group PLC is an asset management business.  We manage
fixed infrastructure and mobile assets for a range of blue chip customers.
Babcock integrates labour, technical capabilities, systems and supply chain
partners to meet the outsourcing needs of customers for 'mission-critical'
capabilities.



In the year to 31 March 2006 sales from continuing business were £837 million.



The Group operates across five core business segments:



Defence Services, supplying facilities management, equipment support and
training services to the armed forces.



Technical Services, providing engineering and logistical support to both the
defence and civil sectors in the UK.



Engineering and Plant Services, supplying design, installation and maintenance
support to the energy sector in Africa and the US.  It also holds the Volvo
franchise for construction equipment in Southern Africa.



Rail, providing design, renewal and installation services for the UK rail
infrastructure.



Networks, supporting the design, maintenance and renewal of power transmission
and cellular telecommunications networks in the UK.



Babcock's head office is in London and the Company's shares are quoted on the
London Stock Exchange in the support services sector (EPIC: BAB).  For further
information, please visit Babcock's website at www.Babcock.co.uk.






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            The company news service from the London Stock Exchange