Shares in Babcock, the engineering titan specialising in aerospace, defence, and nuclear services listed on the FTSE 100, have soared to their highest since 2015 after seeing a price doubling.
The London-based group has experienced an outstanding 2025 thus far, with its stock value escalating from just over 500p at the beginning of January to now standing at over 1,066p, as reported by City AM.
The firm has seen its shares surge following the government’s recent unveiling of its strategic defence review.
Fellow blue-chip companies BAE Systems and Rolls-Royce are also basking in the uplift of share prices triggered by the review.
Included within the 130-page strategic document is the proposal to construct up to 12 new nuclear-powered attack submarines, positioning the UK to bolster defences against potential European or Atlantic conflicts and Russian aggressions, urging a move to “war-fighting readiness.”
This Monday saw Babcock’s shares leap by more than seven per cent, surpassing the 1,000p threshold for the first time since late September 2016.
Presently, the corporation’s shares are trading at levels not witnessed since November 2015.
Strategic review boosts Babcock
The UK government, on Monday, committed to a £15 billion enhancement of the nation’s defence capabilities.
Additional plans include the development of up to 7,000 long-range offensive assets such as missiles or drones alongside a dedication of £1.5 billion towards the erection of six new manufacturing facilities.
The Ministry of Defence (MoD) anticipates that the construction of new submarines will sustain 30,000 jobs into the 2030s, as well as provide 30,000 apprenticeships and 14,000 graduate roles over the next decade.
The review was spearheaded by former Labour defence secretary Lord Robertson, culminating in a total of 62 recommendations.
In April, Babcock reported a substantial increase in full-year profit and revenue, buoyed by escalating military tensions bolstering European defence contractors.
Operating profit rose 17 per cent to £363m on an underlying basis, while revenue saw an 11 per cent growth to £4.8bn.
Net debts decreased to £373m including leases, down from £435m the previous year.
