12 November 2018
Babcock International Group PLC (Babcock or the Group)
Response to speculation and update on trading
Babcock, the engineering services company, is issuing this statement to address recent speculation following the release of a report by the anonymous and so far untraceable Boatman Capital. This report included many false and malicious statements which the Group strongly refutes. At the same time, the Group continues to seek to discover who is behind Boatman Capital.
Ministry of Defence
Babcock has been a key supplier of critical services to the Ministry of Defence (MOD) for over thirty years and we are currently its second largest supplier, providing critical assets and support across the UK's armed forces. We meet with the MOD on a regular basis and our relationship remains as strong as ever. Babcock is one of the 34 top cross-Government Strategic Suppliers, who are continuously monitored, and we are one of the MOD's top 19 Strategic Suppliers. We are also a participant in the Government's Strategic Partnering Programme. In total, Babcock is currently delivering 128 contracts for the UK Government, with future opportunities continuing to form a key part of our bidding pipeline.
A UK Government spokesperson said:
"We monitor the health of all of our strategic suppliers, including Babcock, and remain committed to working with them on a wide range of programmes.
Babcock plays a key part in equipping our world leading armed forces and the MOD spent more than £1.7 billion with the company last year, supporting thousands of jobs across the nation."
Trading
Our most recent trading update, issued on 19 September 2018, confirmed that underlying earnings were in line with expectations and we confirmed our outlook for the financial year ending 31 March 2019. We gave an update on our programme of exiting a number of small, low-margin businesses, which includes the Appledore shipyard, and we announced that we are reshaping our oil and gas business. As previously announced, we will provide an update on these activities at our half year results.
The Board and Executive Management remain firmly focused on delivering for our customers and shareholders. We can confirm that the Group continues to enjoy a healthy financial position with cash generation in line with expectations for the half year ending 30 September 2018. We continue to expect to reduce our debt during the year, with our net debt to EBITDA ratio expected to be around 1.4 times by March 2019 and around 1.1 times by March 2020.
We will publish our half year results on 21 November 2018, when we look forward to providing a detailed update on our performance.
Ends
For further information please contact:
Babcock International Group PLC
Simon McGough Kate Hill
Director of Investor Relations Group Director of Communications
Tel: +44 (0)20 3 235 5592 Tel: +44 (0)20 7355 5312
FTI Consulting
Andrew Lorenz
Nick Hasell
Tel: +44 (0)20 3737 1340
