Trading Update

Babcock International Group PLC
26 September 2007

26 September 2007



                        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 2007.



Overall trading continues in line with the Group's expectations at the time of
the Annual General Meeting and Interim Management Statement in July 2007.



Operational review

With the publication of the 2007/08 interim results, Babcock will be amending
its segmental reporting structure to reflect the creation of a new Marine
Services division.  This reflects the programme underway to integrate the
capabilities of Babcock Engineering Services at Rosyth, Babcock Naval Services
at HM Naval Base Clyde and the recently acquired Devonport Management Limited ('
DML') at Plymouth. Comparative financial results reflecting the new structure
will be provided with the interim results.



Contract wins

The Babcock order book currently stands at £3.2 billion, up from £2.3 billion in
July.  Across the Group there have been a number of successes in winning new
business since our previous statement in July, of which the highlights include:



•               Marine Services:



- The start of the Future Nuclear Facilities project at Devonport to upgrade
fuel handling facilities to enable the de-fuelling of Swiftsure and Trafalgar
class submarines when they are taken out of service.  The development and
construction activity is valued at a minimum of £150 million and will take place
between 2007 and 2011.

- An extension to the Warship Support Modernisation Initiative ('WSMI') contract
for HM Naval Base Devonport valued at £170 million over the next eighteen
months.

- A refit package for the amphibious carrier HMS Ocean.

- A £30 million award to produce MWMIK (Mobility Weapons Mounted Installation
Kit) vehicles for the Ministry of Defence to support operations by British
forces in Iraq and Afghanistan.



•               Defence Services:

An agreement with Defence Estates to integrate the Bristol Bath Total Facilities
Management project into the Regional Prime Contract South West.  This increase
in scope of the Regional Prime contract will be worth at least an additional £10
million per annum for a minimum period of three years.



•               Engineering & Plant Services:

As part of a local consortium, Babcock has been awarded a contract to support
the integration of OEM equipment into the first of three new power stations as
part of the South African government's investment in its power generation
infrastructure.  The first such project will be worth at least £20 million per
annum to Babcock, over a six to eight year period.



•               Rail:

Babcock's Rail business has been selected as one of four main contractors to
continue the provision of future track related support services and Babcock
anticipates that this development will contribute an increase of £30 million in
incremental track related revenues per annum over the current level.



In addition to recent contract successes, the pipeline of potential new business
remains healthy and we are optimistic that a number of opportunities will be
converted to contract or preferred bidder status within the next two months,
worth an estimated £270 million;



Defence Services: Facilities Management for the London Borough of Hackney under
the Building Schools for the Future programme in a Babcock joint venture with
Mouchel Parkman (estimated value £75 million in the first five years).

Babcock Marine:  The refit of the Vanguard class nuclear submarine, HMS Vigilant
(estimated value £180 - 200 million).

Babcock Marine: Design and construction of specialist equipment to support the
decommissioning of the nuclear waste storage vaults at the Berkeley power
station (estimated value £13 million).


Further progress in the future aircraft carrier ('CVF') programme was announced
in July.  Babcock anticipates that the contract for CVF being worth some
£500-600 million to Babcock through 2015.



Good progress is being made on the Royal School of Military Engineering (RSME)
PPP and financial close is anticipated in May 2008 with service commencement in
November.  On approval this contract would add some £40 million per annum
revenues to Defence Services.



Segmental review

All contracts in the Defence Services business continue to perform well.



The newly created Marine Services division is focused on delivery of operational
support to the nuclear submarine flotilla and surface warships of the Royal
Navy.  Negotiations continue with the Ministry of Defence to establish a
commercial framework for Marine Services which, once concluded, will be in place
for a number of years.



Further progress in the future aircraft carrier ('CVF') programme was announced
in July.  Babcock anticipates the contract for CVF being worth some
£500-600million to Babcock through the length of the programme to 2015 and looks
forward to participating with its Alliance partners to deliver the two largest
ever warships constructed in the United Kingdom which will be integrated at
Babcock's facilities at Rosyth in Scotland.



Babcock's business at Rosyth has also won new business leveraging its
wide-ranging skills and engineering capabilities.  Babcock is engaged in modular
construction for utility systems for the new Birmingham General Hospital and
designing ship conversions for mining on behalf of DeBeer's via an enabling
agreement.



Our nuclear business is very busy and over the next six months we will be
bringing together the various components into a single, focused business.



The weakness in the Rail business noted in the July Interim Management Statement
has continued and the Division's operating results for the first half will not
meet our original expectations.  In part, this is due to the cost and extra
resource required to respond to Network Rail's plan to reduce the number of
suppliers for track renewals and in part due to internal operating difficulties
which are being addressed.  The hiatus in the commissioning of signalling
projects appears to have ended, and combined with the additional track renewal
work referred to previously, offers a much improved outlook for the second half
of the year.



Engineering & Plant Services in southern Africa continues to enjoy strong growth
in both the equipment and engineering divisions, assisted by a robust economy
and continued government investment in infrastructure



In the Networks business, activity has been dominated in transmission by the
National Grid Alliance (in conjunction with AMEC and Mott MacDonald) together
with the contract with EDF Energy Solutions, and in telecommunications, by
activity in support of the digital switch-over for television broadcasting.



Strategic developments

The acquisition of DML was completed in June and endorsed by the Office of Fair
Trading.



Babcock announced on 31 August that its offer to acquire the ordinary share
capital of International Nuclear Solutions plc ('INS') at 63 pence per share had
closed.  At this time the Babcock shareholding in INS stood at 64%.



Summary

The overall trading environment in Babcock's market sectors remains excellent
and continues to offer significant organic growth opportunities throughout our
business portfolio.  Babcock will announce its interim results on 13 November
2007.



                                     -Ends-



Enquiries:


Babcock International Group PLC                              [phone]
Peter Rogers (Chief Executive)
Bill Tame (Finance Director)
Investor Relations

Financial Dynamics                                           [phone]
Andrew Lorenz
Susanne Yule














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