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Babcock International Group Reports Decline in Pretax Profit for Fiscal 2023

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Babcock International Group, a leading engineering company, announced on Thursday a decline in pretax profit for fiscal 2023, falling short of market expectations due to higher costs.

  • Pretax profit for the year ending March 31 was reported at £6.2 million ($8 million), significantly lower than the £182.3 million recorded in fiscal 2022. This figure also missed the pretax profit consensus of £193 million, based on three analysts’ estimates from FactSet.

The company attributed the decrease in profit to a loss of £77.4 million resulting from acquisitions and disposals, compared to a gain of £172.8 million in the previous year.

  • Underlying operating profit, which excludes exceptional and one-off items, amounted to £177.9 million in fiscal 2023, down from £237.7 million the previous year.

Despite these challenges, Babcock remains optimistic about its future prospects, as it anticipates organic revenue growth and further expansion of underlying margins in fiscal 2024.

  • Revenue for fiscal 2023 increased to £4.44 billion compared to £4.10 billion in the previous year, surpassing the revenue consensus of £4.12 billion according to eight analysts polled by FactSet.

As a major contractor for the U.K. government, Babcock also provided insight into its future plans, stating that it currently has approximately £2.85 billion of revenue under contract as of April 30. Additionally, the company expects to secure around £700 million in framework orders for the new fiscal year.

In summary, despite the decrease in pretax profit for fiscal 2023, Babcock International Group maintains a positive outlook, with confidence in its ability to achieve organic revenue growth and expand underlying margins in the coming year.

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