Defence company Babcock International Group’s activities have contributed approximately £4.3bn ($5.56bn) to the UK’s Gross Domestic Product (GDP) in the fiscal year (FY) 2024, according to the Oxford Economics’ new report.
This marks an increase of £1bn from the fiscal year 2022.
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The latest analysis conducted by Oxford Economics highlights the economic impact generated by Babcock within the UK.
The research suggests that for each pound allocated to Babcock for UK defence projects, there is a threefold return to the national economy.
The report further details that over the past two years, Babcock has been instrumental in bolstering employment within the UK. The company now supports 67,000 jobs nationwide, which represents a ratio of one job for every 550 within the UK labour market.
In FY 2024, the company’s Marine business alone accounted for £1.3bn of the company’s GDP impact and supported 20,400 jobs nationwide while £1.9bn was supported by the Nuclear business unit, along with 30,200 jobs.
The Land and Aviation businesses combined to contribute an additional £1.1bn to the UK GDP, supporting 16,400 jobs.
The company has spent £550m with UK small and medium enterprises (SMEs), supporting more than 3,800 businesses.
UK Defence Procurement and Industry Minister Maria Eagle said: “The company supports thousands of skilled jobs across the South-West and Scotland and invests in British SMEs, building up local communities and developing talent through graduate and apprenticeship programmes.
“Our Defence Industrial Strategy will help direct more defence spending to British-based firms, such as Babcock, boosting defence jobs in every nation and region.”
Other findings in the report show Babcock’s influence on regional economies, with more than 12,000 employees in the South West of England and 5,400 in Scotland.
Additionally, Babcock has trained 1,800 individuals in graduate and apprenticeship programmes.
The Oxford Economics’ report also indicates that Babcock’s activities have contributed an estimated £1.1bn in taxes to the UK Exchequer. This includes both direct and indirect tax contributions.
Babcock chief executive David Lockwood said: “We are proud of the role we play across the country. Babcock doesn’t just help protect the UK; we are helping to drive prosperity. At this critical time for national security, our highly experienced teams play a key role in developing sovereign capabilities to create a safe and secure world, together with our wider industry colleagues and partners.
“We are investing in infrastructure, technology, and skills that we need today to bolster the growth of our business for tomorrow. This commitment to our customers and continuous investment in our people is making us a better business. We are determined to continue supporting the communities we work in whilst delivering the capabilities our armed forces need to keep the country safe.”
In a recent trading update for the nine months leading up to 31 March 2025, Babcock said it expects to surpass analyst forecasts for both revenue and underlying operating profit.
Based on data aggregated by Vuma as of 4 February 2025, the projected revenue for the fiscal year 2025 is estimated at £4.67bn, according to analyst predictions cited by Babcock.
These forecasts span from £4.51bn to £4.78bn.
For underlying operating profit in the same period, the average expectation stands at £333.5m, with forecasts ranging between £327.1m and £339.7m.
The board now anticipates revenues to reach approximately £4.9bn for FY 2025, attributing the expected overperformance to double-digit organic growth in the nuclear and marine sectors.
