Babcock confident on long-term outlook after profit jump

By Li-mei Hoang LONDON (Reuters) - British engineering and support services company Babcock reported a 32 percent rise in full-year pretax profit on Monday, driven by new contracts and strong demand in its existing businesses. Shares in the 124-year-old company were up by 1.8 percent to 11.01 pounds by 1012 GMT, one of the biggest gainers on the FTSE 100 index <.FTSE>. Chief Executive Peter Rogers said he expects organic growth, excluding acquisitions, of about 10 percent in the coming year after pretax profit rose to 417.7 million pounds for the year to March 31. "It's what we expected ... It's very straightforward. It's retaining the contracts we've got, delivering so that the contracts keep on growing, and winning new ones," Rogers told Reuters on Monday. "I can't call it 12 months ahead quite that closely, but you know we'd be looking for 10 percent again this year." Babcock reported full-year revenue of 4.5 billion pounds with an order book at a new high of 20 billion pounds. It also raised the final dividend by 10 percent to 23.6 pence per share. "The full year results were solid, with 12 percent organic growth ... and the outlook reads confidently," said Deutsche Bank analysts in a note. "There does not seem to be a deterioration in the oil and gas outlook which would have been a concern for investors coming into today." Babcock, which obtains 45 percent of its revenue from contracts with Britain's Ministry of Defence, said that its bid pipeline stood at 10.5 billion pounds. Rogers, 67, intends to retire within the next couple of years but only after pursuing overseas expansion, building on last year's acquisition of helicopter transport company Avincis. "Clearly we are focussing on growing our business outside the UK," Rogers said. "Continental Europe, Australia, Canada. More in Africa. I think Mozambique could be a serious-sized business within five years." Last year, Babcock spent 200 million pounds on acquisitions, up from 63.1 million pounds a year earlier. Rogers said he had no plans to purchase anything significant in the near term but did not rule out a large purchase. "We're not out aggressively looking for acquisitions," he said. "But we have got enough firepower to do acquisitions of that nature if something which plays right to our strengths or we feel is a big advantage comes along." (Editing by David Goodman/Ruth Pitchford)