Babcock has seen its share price reach a five-year high after the firm increased its revenue expectations in its Q3 trading update.

The designer and manufacturer of specialist defence and civil equipment said the strong trading performance in its half year report has "continued through the third quarter", and said its January performance had also been "encouraging".

As a result, Babcock has increased its expected revenue for the full financial year to £4.9bn.

It stated that this expected overperformance is due to "double-digit organic growth in nuclear and strong growth in marine".

Babcock said the growth in nuclear is driven by "increased new build and decommissioning work in civil nuclear", alongside increased "submarine support activity and higher than originally expected infrastructure revenues".

In marine, the firm said that growth is "enhanced by higher LGE volumes", as well as the ramp up of its Skynet programme.

Chief executive officer at Babcock, David Lockwood, said: "Today's announcement demonstrates that successful execution of our strategy is continuing to deliver value for all our stakeholders. Our engineering skills and know-how are in ever greater demand and with significant opportunities before us, I look forward to further profitable growth."

Investment director at AJ Bell, Russ Mould, concluded: "As countries strive to hit net zero targets nuclear has emerged as an increasingly viable energy solution and Babcock is getting more work in decommissioning old plants and building new ones. The company has won major contracts on UK submarines and has a big part to play in the UK military satellite Skynet programme.

"It has been an up and down decade for Babcock beset by financial problems and uneven financial and operational performance, but under Lockwood and numbers man David Mellors, the past couple of years have seen a revival in fortunes.

"Today’s upgrade is just the latest endorsement of the current strategy and has notably helped drive the shares to a five-year high."

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