Babcock International Announces CEO Succession Amid Strong Financial Performance

Babcock International Group PLC (BAB) has announced the retirement of Group Chief Executive David Lockwood by the end of the calendar year, with Harry Holt, current CEO of Babcock's Nuclear sector, named as his successor.

The announcement coincides with a positive third-quarter trading update, reinforcing confidence in meeting full-year expectations.

The defense company's trading update for the nine months ending December 31, 2025, reveals a continuation of the strong performance reported at the half-year mark. Babcock is delivering good organic revenue growth and underlying operating margin progression.

With the majority of forecast revenue for the year now contracted, management expresses confidence in achieving FY26 targets, including an 8% margin. Potential upside exists if Indonesian Arrowhead licenses are delivered within the year.

Growth was particularly strong in the Nuclear sector, driven by clean energy projects and submarine support. Aviation also saw robust growth due to the French Mentor 2 contract. Marine reported good growth due to higher LGE volumes and the Skynet program. These gains offset lower revenue in the Land sector, which experienced reduced activity in Rail.

Babcock highlighted several strategic achievements, including being selected as the prime industrial partner for Indonesia's £4 billion Maritime Partnership Programme (MPP). A Letter of Intent was signed on January 20, 2026, covering the MPP's aims and an agreement for the sale of two further Arrowhead 140 licenses.

Progress continues on the T31 program, with the keel laid on ship 3, HMS Formidable. Babcock also expanded its partnership with HII to support the US Virginia Class submarine program.

The company is also positioning for the UK Royal Navy's autonomous transformation through the ARMOR Force initiative, enhancing its partnership with HII and Arondite. UK Land programs are progressing, with the ramp-up of the £1 billion DSG follow-on contract and the rollout of the first Jackal 3 “Extenda” vehicles. Discussions continue regarding the follow-on to the Future Maritime Support Programme (FMSP).

Babcock is executing a £200 million share buyback program, having returned £90 million to date, and intends to complete it around the March year-end.

Dame Ruth Cairnie DBE, Babcock Chair, said, “David has been an exceptional Chief Executive…he leaves Babcock in a very strong position for the future, where the Group's unique capabilities have never been more relevant.”

Harry Holt, Deputy CEO, said, “I am deeply honoured to have the opportunity to lead Babcock through its next chapter…With our great people and our financial strength, we have the means to confidently address the exciting opportunities before us.”