The conference is now. Okay, good morning, everyone. I'd like to welcome the people on the webcast and the conference line. Just so you know, there are no planned fire alarms, so but there are people who will get you out of the building in the event of said fire. When we get to Q&A, the plan is to take questions in the room first, then I'll hand over to the operator, who will do calls online, then I'll hand to Andrew, who will do calls on the webcast. Just so you know, that's the process to manage the technology. He'll hand back to me for closing remarks, unless Andrew decides he wants to do them himself. Key messages. This has actually been the first fun year in Babcock. I think that's partly 'cause it's been a year without having to work with COVID restrictions, but also because you can really feel the progress start to take hold at an operational level, which is starting to turn into the financial results, leaving us better positioned, so we have much stronger relationships with our clients around the world, which in turn, builds confidence for the future. That's gonna be the message you're gonna get throughout this. I do want to focus on the things at the bottom, though. Cash and how we maintain positive cash is really important to us. We talked before about setting targets and what's the right margin target, the balance between capital and employed risk and cash. Driving cash, number one priority, that will inevitably, through good operational performance, lead to margin improvement. Growth is coming just because of that, because as we execute more, customers come to us for that incremental work, which maybe they were holding back when they were worried about our execution. We don't have to do anything exotic to get the growth. We just need to continue to drive performance. All of that has enabled us to issue guidance for the first time, and also for the board to reconfirm the intention to institute a dividend for 2024. You can see that progression through as the operational performance begins to really bite. We had lots of debate about where to put a Type 31 slide in this presentation, and it kind of clunks wherever you put it, but we need to sort Type 31 out, so we can then talk about the rest of the progress going forward. Type 31 is five ships up to what's called VAD, Vessel Acceptance Date, so not in service date. That's what we're currently contracted for. Operationally going well, we're about 40% through HMS Venturer, started HMS Active, but as you know, we've declared a loss of GBP 100 million over the remaining life. A GBP 100 million provision now for the cash to go out between now and the end of 2028, and David will touch on that as he goes through the numbers, but it is one of the reasons why we're committing to cash conversion of greater than 80%, because we do have to fund this onerous contract. I guess there are three questions I get asked about Type 31, and I thought it was best to just address them up front. The first is: How has it affected your customer relationship? If anything, it's strengthened it, because we've now got a mature relationship where I can sit with a head of commercial, in the MOD, and we can agree that we don't agree, and that the contract provides the provisions to deal with that, and that's what we're doing. We can put that in a box, we can continue to win things like the Skynet program. We announced the next path, the submarine work. We've announced supporting the UK Gifted kit in Ukraine and so on. The rest of the business is isolated from this thing, which is being professionally and properly handled. The next thing is about, you know, what does it tell you about the control environment? As you will see through this presentation, since I arrived, we've been strengthening the control framework. David and I have got long experience of the value of doing that. The commercial control environment is now much stronger. This is the last of the programs that were contracted prior to our arrival, but the control framework is much stronger. Finally: How confident are you about the 100? Where are you operationally? As I've said, we're 40% of the way through the first ship. We have had both the engineering and operational and programmatic performance, and plans, externally reviewed. This is a, as strong a baseline as you can get at this stage in the program. Sorry, the other thing I should say, actually, is notwithstanding that negative, and it is clearly a negative, the export programs continue. Indonesia and Poland continue to run well, continue to generate profits, and it continue to show that the ship itself is highly competitive on the international market and provides a platform for strong, profitable growth. You know, there are options in the UK as well. Did we want to invest this additional amount in this program? Of course we didn't, but it doesn't mean that being in this part of the industry is a bad thing. There is still plenty of opportunity to come from this investment. We put this slide up a while back. Stabilize is complete. Portfolio alignment's complete. We are not a forced seller of anything, we have kept the businesses that it's right to keep at this time, and we've sold what we wanted to sell. This is the portfolio we believe we should be running at this time. Execution is the next key phase, the best parts of early growth will come from that high quality execution, and we are seeing that on a range of our framework programs, where as our execution improves, the incremental orders just naturally flow. That is the best low risk growth. Then there are other growth opportunities outside, both in terms of increasing our support footprints. For example, we've broken into the land domain in France for the first time this year. We've broken into a broader range of HF Comms opportunities. There are plenty of opportunities that are close to home, that are things that we are good at and getting better at. Today, where does that leave us? Much strength and balance sheet at 1.5 times would be 1.1 when the Type 31 loss is out of the system, 68% defense on a pro forma basis, and very much aligned with our customer needs. We are about getting the best out of what you've got, being affordable, available and capable. What the Command Paper the UK's just released has demonstrated is the ability to maximize your existing capability will be a dominant feature for the next few years, and that is Babcock's sweet spot. As I said, this has led us to be able to come up with medium-term guidance for the first time of margins greater than 8%. Cash conversion greater than 80%, that's after funding loss provisions. Organic growth, mid-single digit, but with strong visibility, so that growth is underpinned by backlog and orders that naturally flow from frame contracts. With that, David's now going to excite you with all the financial detail that underpins what I've just said. David? Morning, everyone. I'm really pleased with these results and the progress behind them. I'll just highlight the four key things before we go into any detail. Firstly, the overall performance was in line with expectations, or in the case of cash and debt, significantly ahead of expectations. Second, the balance sheet is much stronger than it's been previously. Thirdly, the FY24 expectations are unchanged. Fourthly, as David's already touched on, we're now confident enough to provide medium-term financial guidance. The key financial headlines for the year are set out here. Organic revenue growth was 10%, with growth in all sectors. Excluding the Type 31 loss, the reported underlying operating profit was up to GBP 278 million, with margin progression of 50 basis points. EPS was in line with expectations at 33.8p. Cash flow was better than expected, as I've said before, and that allowed us to accelerate some pension deficit payments. The resulting free cash flow was GBP 75 million. The resulting net debt was down GBP 200 million to GBP 346 million on a pre-IFRS 16 basis, which is the start point for the covenant ratios. On covenants, the gearing ratio is 1.5 times, as David said, which is comfortably inside the range we'd set for the group of one-two times. The last bullet on this slide is a technicality to note, the GBP 100 million Type 31 loss gets booked in three places, so a GBP 43 million revenue reversal, a small asset impairment, and a contract provision. To group revenue, there are two main points on the revenue bridge before we go into the sectors. Firstly, the organic revenue growth of 10% that you can see in the middle of the chart there. Secondly, the FY23 baseline revenue on the right-hand side in yellow. This is the revenue of the retained group for the FY23 year, for you to use with forward projections. On to underlying operating profit, the bridge here has three main variances to touch on. Firstly, the GBP 36 million profit improvement, which was driven by marine, land, and aviation. I've called out separately the GBP 12 million one-off non-cash credit there, which was in land. Thirdly, of course, the GBP 100 million Type 31 loss. Again, on the right-hand side, we've given the FY23 profit and margin of the retained group, in yellow there. That also excludes the GBP 12 million one-off. So that's the way we see the retained group exiting FY23. On to the sectors, with marine first. There's a lot of detail on all these slides, so I'll just pull out the key points. I've also included the profit and margin before and after Type 31 loss here. The key points are firstly, the organic revenue growth of 8%, which is very strong, driven by growth in ship support, liquid gas, and emission systems businesses. To note here, there is GBP 260 million of low or zero margin revenue going through marine currently, and obviously Type 31 is the biggest component of that. On profit, the factors I've listed out on the right-hand side here have enabled margins to hold up at 7.8%, despite the fact that last year's 7.8% had some higher margin license fees in. On to nuclear, the main points are the revenue growth, organic was 17%, and that was driven by the infrastructure projects in Devonport. As you can see, we've put the numbers on here. We're expecting FY24 infrastructure revenue at least this level, if not higher, depending upon project phasing. Despite the higher revenues in nuclear, the profits were flat and the margins were down, due mainly to future inflation assumptions on programs and the final project write-off on a program which is very near completion. Also, as a reminder, the infrastructure revenues I keep mentioning are at lower margin than the rest of the work. As we look forward, we expect these drags on the nuclear margins to reduce and eventually disappear. There's no reason why this sector shouldn't achieve broadly the same margins as the others when it's executing well. Moving to land, the key factors driving both revenues and higher margins are as follows: In Australia, we've now commenced the Defence High Frequency Communications contract we announced earlier in the year. In South Africa, the increase in vehicle sales to the mining industry more than offset the loss of the Eskom contract in the previous year. In the UK, the sector delivered better margins and growth in fleet management and training, and the resulting sector margin is boosted by this GBP 12 million one-off. Excluding that, there was still very good progress on the margin to 7.4% in the year. On to aviation. The divestment of the European AES business completed at the end of February, so the reported numbers have 11 months of trading within them. I've put the retained businesses in this middle box here. The retained businesses delivered revenue growth and profit growth in the period. The margins were flat, notwithstanding the fact we had some extensive bid costs on the FACTS program that we've talked about before. That was submitted during the year, but those costs obviously weighed on the margin during the period. On to cash flow, with operating cash first. Cash conversion of 110%, as I've said before, was better than we expected. This was caused by two factors, working capital and CapEx. Taking each in turn, the working capital inflow of GBP 104 million, you can see on this slide, was largely driven by earlier customer receipts than we previously expected in the final part of the year. This inflow also absorbs and offsets, more than offsets, the final unwind of the historic balance sheet stretches that we fully paid off during the year. I'll come back to that. The second thing that I said drove cash conversion was slightly lower CapEx. The next four bars on here are the CapEx and depreciation. You can see they pretty much net off in the year. We expected it to be a bit higher, but that's just CapEx timing. The last movement on the chart, this GBP 44 million labeled Other, that's the add back of the Type 31 owner's provision, primarily. That all that gets us to an operating cash flow of GBP 307 million. One point to note, that we've mentioned in both the release and is on the slide, in the period, we did finance one of our French aircraft contracts during the year. That was done by non-recourse factoring. That didn't impact operating cash flow. That matched receipts and payments for the aircraft in the period, there was a GBP 12 million financing charge on that. That's fully settled in the period. Moving on to the bottom half of the cash flow statement and looking at the two big movements. Firstly, pensions. The strong cash performance I mentioned earlier allowed us to accelerate GBP 35 million of future years' deficit payments into FY23, that reduces the burden on the next three years' free cash flow. The total deficit payments for the year were at GBP 142 million. The expected payments for FY24 are substantially lower, at GBP 65 million. Secondly, interest paid was up largely because of the GBP 12 million program finance charge I mentioned earlier. You may remember that we're 85% fixed on our debt, we don't have much exposure to variable interest rates, but we did have some. The fact that the money on the disposals came in very late in the year, and we have that small amount of variable interest... exposure did tick up the interest paid slightly as well. The next three boxes, the tax joint venture dividends and exceptional items, they're exactly as we'd guided, no surprise there. The resulting free cash flow was GBP 75 million, and I've put some guidance for FY24 on the slide there. I've put this slide up at all the previous results presentations to show the progress on repairing the balance sheet and what's going on behind the numbers. As the top box shows, the net debt's now down over GBP 1 billion in this two and a half year period. We've mentioned the gearing ratio at 1.5 times. Pleasingly, we're upgraded by S&P in December to BBB, that's good to recognize. The middle box are these historic cashflow period end stretches, which, as you can see, started off at GBP 466 million. They're all gone now, so that will no longer be a drag on operating cash flow. We've got the pension deficit in the third box here. If you add these three items, these debt and debt-like items, as I do, you can see that we've substantially improved from GBP 2.8 billion 2.5 years ago to less than GBP 1 billion. In summary, we're in a much better place from a balance sheet resilience point of view than we were. To finish with the outlook and guidance, taking these three sections in order, just back on the baseline, the FY23 baseline, just to confirm then, GBP 4 billion of revenue, GBP 265 million of profit, that's the retained group exiting the year. Secondly, for FY24, we're maintaining expectations for performance for the year. The overperformance on cash in FY23 may mean that FY24 is back-end loaded, but we're still gonna go for the same number. And, as you know, we have confirmed that we'll be reinstating the dividend in FY24. Then thirdly, the medium-term guidance that David mentioned earlier, so we feel confident enough to put out guidance for cash conversion, margins, and revenue growth as set out here for the next three-five years. With that, I'll now hand back to David. I told you it was gonna be exciting. How do we, how do we get from one to the other? This is what David's just summarized. I think what is strong about Babcock? We have great visibility on that revenue growth, so both in the order book, in the frameworks and line of sight of the bids we are bidding, we have clear visibility of that growth. The other thing that's quite interesting is, as we've instigated stronger commercial controls, and therefore have bid in a more robust fashion, it hasn't really affected our win rate. One of the things we were tracking as we got more professional in our bidding, was, does that mean that we're, you know, by not making concessions to customers, we're gonna start losing things? That hasn't happened so far. We believe that there's no drag on growth by being more professional in the nature of the contracts you book. As we've said, 50% of your destiny is in the shape of the contracts you book. 30% is how you mobilize, 20% is how you execute, and we'll come to that on another slide. Getting that growth is quality growth. I've got a slide on the legacy fade in a minute, but if you look at the mix over time, the margin improvement is in our hands. It's not a market-driven thing, it's the quality of our execution of the legacy and the new orders that will drive that margin growth. Cash conversion, as David said, is all about structuring the contracts with cash in mind, not just end margin in mind. This is the fade of the low and very low and zero-based and zero margin programs. You can see the impact on margin, that having 10% of your revenue at zero essentially means that 90% of your revenue is generating all your margin. As that fades, there's a natural margin improvement anyway. I've touched on this a bit, the bidding mobilization delivery, 50, 30, 20. It's a mantra we've used for the last three years. Really, it's the functional processes that go through that drive all of that. The project management framework now goes right back to the bid. How are we going to deliver this, is understood right at the beginning. It sounds obvious, but it wasn't always the case. Having a global business management system, so the whole business operates in the same way, when you conduct a peer review, someone coming from another business recognizes what they're looking at, means the quality of peer reviews goes up. Having a centrally led commercial function, which reports to David, means that we understand the commercial risk we are taking when we take it in a consistent fashion. We are paid to take risk. We're not a risk-free business. We make our money by taking risk and managing it well. That means you need to understand what you're taking on from the get-go, so you mobilize to manage the risk you've decided that you're competent to manage. Having a centrally led commercial function really matters, as does improved financial operating controls for the same reason. If we look at how we have bid life ex programs on submarines around the world, we've done it differently. We definitely have bid the air crew training program in Canada, which is a huge program, quite differently from how it was being bid when we arrived, fundamentally. If we look at how we resourced Australian High Frequency Comms, for example, it was initially gonna be a larger UK exported capability. Now it's an indigenously delivered Australian capability working with the UK, because that was the best way to mobilize it. If you look at the improvement on the DSG contract, that has spun out a whole host of opportunities in the land domain, in the UK and outside. If you get that right, it just naturally drives growth and margin. I will touch on the market, but really, the market is not our issue. The issue for us is the faster we fix the stuff on the previous side, the more cash and margin we'll generate. In the macro world, geopolitical uncertainty, defense spending, quite a lot of it promised, not yet delivered, if I'm honest, in some countries, and defense requirements. I will come on to people. There's a lot of change going on, part of the art of running Babcock is we're big enough to be a key partner for governments, but we're small enough to be more nimble than some of the global giants. That's something our customers really value. Getting that internal infrastructure right, so we do high quality work without becoming a global giant, but still being nimble, is really important. What customers need is the best from what they've got, so they need value for money 'cause they've got notwithstanding the growth of defense budgets, they've got more demand than they've got cash. They need high utilization of today's assets. They need to modernize today's assets. We've seen in Ukraine what happens when legacy assets are put into the battlefield, they don't last. They need flexibility. They need to start on one thing and finish something else. We're doing that on the front lines for equipment support. We do lots of technical training. It's a very strong part of our business, probably an unsung part of our business. That's about 80%, and then we do design, develop, manufacture, and integrate technology. That delivers the availability, affordability, and capability that we've talked about for a number of years. Just some examples. On equipment support, we've won the Skynet program, which is the delivery wrap, which takes us into the space domain and creates a whole host of opportunities outside that initial contract. RMP West is support for the Australian Navy, now we're linking the way we do support to the Queen Elizabeth class in the UK. Bringing this together, in technical training, when we bid the FACTS bid, we had people from the UK pilot training and people from the French pilot training, working with our Canadian team on the FACTS bid, bringing the whole group together from both a technical, operational and commercial sense, to say, "This is how you deliver integrated pilot training." That's not something we were capable of doing three years ago. I do wanna touch on this: Babcock is a people business. We have 26,000 people. In many cases, the improvements in outputs we have seen have been delivered fundamentally by the same operating teams, just being led differently and working to different processes, but the same people. We've never had bad people, we've always had good people, but we haven't always got the best out of them. Our job is to get the best out of the best people, that starts with attracting the best people, then training and retaining the best people. Our people and our customers, particularly our people, really care about how we impact the communities we work in. Firstly, we have to open our minds to employing the broadest range of people, whether that's gender-based, whether it's age-based, whether it's ability-based, whether it's education-based. We have schemes where we have people who wouldn't normally meet our apprenticeship standards, where we do pre-apprenticeship training so that we can then get them into the scheme. We have much more flexible return to work if people have been off for maternity or paternity. We have much more flexible late career, so people don't have to make the choice of work or retire. They can go to much more flexible arrangements. We've introduced a volunteering framework, so you can have a day off a year, paid to work on some form of volunteering. We have a shadow ExC o to my team so that we actually get to have the organization's view of the things we're considering. We've got a whole bunch of things that are going on, which drive our employee, employer proposition or employee proposition, which really matters. We've, in the organic increase in head count over the last year is about 900 people, which is really good going in a tight labor market, tight labor market around the world. We have to keep that up by, as I say, attracting, training, and retaining from the broadest possible church. This isn't kind of a bolt on to our business. This is kind of who we are, and really matters to our employees, our customers, and the communities we work in. The great thing about making money is that you can have a capital allocation framework. There's not much point in having one if you're not making any money. Our number one priority is organic investment. We have a whole bunch of things we can do to make this business better, to improve the margin through better systems, to grow through investment in new capabilities. We have now elevated that from a kind of sector level allocation choice to a group level. Where do we place our bets? We obviously need to maintain a strong balance sheet. It has been a slog to deal with the on and off balance sheet financing, and we're never gonna give that up lightly. We need to pay an ordinary dividend because it's the sign of a healthy company, and it's a rightful expectation. Outside that, there are bolt-on opportunities. They will be very close to home. They will either be to help with new geographies where we've already got a presence, or they will be technology. They're not, we're not gonna try and throw sixes. Yeah, these are gonna be to underpin the core organic plan if we do them at all. David has said in a number of these presentations, you sometimes get windows of opportunity on pensions, where you can do deals, where you get good value for money. We're always looking at that, at the best way to manage the pension deficit most cost effectively, and if we see acceleration opportunities that make sense, we will do them, if the funding makes sense. Then, obviously, ultimately, if there are surpluses after all of that, there'll be further shareholder returns. My summary is really the first slide, which is excellent progress in operational terms, which has turned into excellent progress financially. Much better positioned in the marketplace, which does give us real confidence. With that, what do I have to do on questions now? Oh, we're at questions. Have I got a button that says questions? No, it says Babcock. We're gonna do questions from the room first as a reward for turning up. I don't know who's in charge of the mic, so I don't know who's gonna Oh, Debbie's gonna decide who gets the first question. Well done, Debbie. Ooh, lucky me. Chloé Lemaire from Jefferies. I have a couple, please. First one is on AUKUS, actually. If you could help us frame a little bit what you consider as the potential addressable work that you could win on what could be. On AUKUS? Yes. I think on pillar one, which is the submarine part, which is obviously closest to home, in the near term, the big need from an Australian perspective is the infrastructure to support the Virginias that will be rotating from America. I think that's the big near-term stuff, and that's the discussions that we would have. Obviously, the build program for the UK boat is some way out. Okay. The second one is probably for David, the other one. On free cash flows, you could. Yes. If you could come back on, the big driver, for the performance, in, fiscal 2023. Notably thinking on the balance sheet, window dressing, unwinding, and, whether there were some working capital cutoff effects, and then when we think of full year 2024, how these evolve. Yeah, okay. Primarily, the big thing was earlier receipts than we expected, about GBP 70 million in round numbers. You only get the cash once, so if you're to look at that on its own, you'd say, "Well, then FY24 should be lower by that much then, shouldn't it?" We think we can still perform FY24 as originally expected. Therefore, we'll overachieve, if you like. That was the big one. When I said it will be back-end loaded, obviously, most of those early receipts came out in the first half, but we think by the time we get to the full year, we can still generate the cash we originally expected out of 2024. If that, is that what you wanted? Yes. Yes. Just to follow up on this, on the Type 31, loss impact on free cash flow, how we should we think about the phasing of that? We haven't been precise about that, except because we don't really want to give, you know, in-year numbers, but that GBP 100 million is over the life of the program, and the life goes out to 2028, so make a punt at that. All right. Thank you. Wonderful. Oh, you're being ignored, sorry. Hi, David Perry at J.P. Morgan. I've got three, maybe first one might be for Mr. Lockwood. You had the press release last week, on Vanguard, and you alluded to some positive discussions with the MOD on a new contract to replace FMSP, I think. Uh-huh. Can you just elaborate a little bit on what the new terms will be and when that's expected to be finalized? Thanks, David. Can I elaborate on the terms? Probably not much beyond what's in the release in terms of that's the direction of travel. I think no one wants the kind of discontinuity that we had between MSDF and FMSP when we're going on to one year. As you know, we went onto a one-year program to bridge the gap prior to my time when you've got a long-term support for a fleet. The aim is to make sure that doesn't happen again. To finish the discussions well inside the FMSP framework. I think the sentence was contract terms similar to your peers, which I presume is, say, BAE. I think it's a peers. Yeah in the nuclear industry. Yeah. Do I surmise from that it's cost plus that you're aiming to achieve? Well, similar. Okay. When could it be in place? I think we started with the next boat saying this was the initial order on the terms. Well, before the end of FMSP. I think after that, it's quite difficult to be precise, because obviously it's a very big order, and there's quite a lot going on. Can I ask a couple to Mr. Mellors then, please? First, on the EBITA margin guide, thanks for the medium-term guidance. I think it's at least 8% in three-five years. Can you just give us some sensitivities? What determines whether that might be three or five years? What does at least eight mean? I mean, how much can I dream? What's a realistic ceiling? Then can I just check with you on the free cash flow guide for this year? You've given us a lot of the moving parts. 80% cash conversion, you've given us tax, pension, interest. Just to make sure I'm not missing anything, I think that gets you very close to triple-digit free cash flow in FY24, unless I'm missing something. Okay, margin first. We've said three-five years. I'm not gonna pin it down to any one. There'll be margin progression from now on. It won't necessarily be linear, and we will get in that period to above 8%, as we have said. You can get into all sorts of detail on timing and amounts and how much is infrastructure revenue, because that might go up quite a lot before it comes down, and that's at lower margin. There's quite a lot of noise effects that could just confuse if we went into that. That's why we've tried to stay quite high level. There'll be progression each year, and we'll get above 8%, and that will be a start point. On free cash flow, not that we give specific in-year guidance, but I can completely understand why you've taken the moving parts that you have, and it sounds like your math is broadly accurate as well. Can I just say, David, the other, the other. There is a link between growth and margin progression, because if you win, just in round numbers, a large program that you bid at 10%, you're likely to trade the front end of it at, say, 5% or less, depending on your, the risk profile and with the expectation the back trades at 15%, because that's just how the accounting rules work. Bizarrely, if we, if we're successful, say, in the export markets to the upper end of our expectations, that will actually hold back margin progression just because of accounting of the orders in the early stages. That's the other reason we're not being precise, because of the interaction between growth and margin. Good morning, Joe Brent at Liberum. Three questions, if I may. Firstly, on Type 31, I think you're absolutely right to sort of prioritize that in the slides, and my sense was that the GBP 100 million should be enough. Could you give us an indication of kind of what your confidence levels are, when we expect to hear more, what the parameters might be? 'Cause GBP 100 million is obviously a precise number and something that is presumably quite hard to pin down. The second question- Oh, can I do one at a time? Sure. 'Cause I'm getting old. We, as I said, we've had all of the estimates, programmatic, technical, and operational, externally verified, so we are as confident as we can be on those. As I said, that the program to go obviously includes appropriate contingency for the risks we can see. When we did the contract and balance sheet review, you will recall that we reduced the trading margin on Type 31 from whatever it was to zero, because we said. I said that at the time, the big key de-risking milestone is the first ship integration, 'cause that's when you know you've got a product. We are 40% of the way through the first ship, so these estimates are based on a lot more information than we had three years ago, but we're still 40% of the way through the first ship. That's the big milestone to go to know that you've really de-risked the program. Thank you. The second question was on the strategic development of the group. You've said the disposals are complete. Yeah. When the strategic review was done prior to you joining, in 2019, there were other assets highlighted then that might have been seen as non-core. Clearly, you have your own view, but could you tell us why things like rail, baggage handling, you know, some of your energy businesses, and South Africa, why those are core going forward? Because we're not a forced seller, our job is to look at what's in the interest of shareholders, which is what price could you achieve versus the value these businesses just generate, and that includes management overhead. If you take something like the LGE business, for example, that's as David said, that's a strong business that has very low management overhead from people like us. It's very well run. You'd want someone to pay a very good price to buy that business. If you can't see that in the market, then it's in shareholder interest to retain. There will always be businesses like that that are on the kind of not right at the core of your group description, which are nonetheless strong businesses that contribute well to the group. That's kind of the basis on which we evaluated all of the businesses, and at some point, you have to declare yourself done, otherwise everyone in the business, who works in the business is constantly uncertain, and you can't take the group forward. That's why we decided we had to declare an end to the process. Having got the balance sheet to where we needed it to be and having got the prices we wanted for the things we sold, that's why we called a halt. Thank you. Then a final question, if I may, probably for David Mellors. On the pension, a lot of companies are reporting reduced balance sheet deficits and reduced technical provisions. I think yours has deteriorated despite the extra money, and I note that your pension scheme is unusually well matched assets, liabilities with the LDI. Could you just talk to the mechanics and why they haven't got better? Yeah. Actually, in the year and two before, it had got substantially better, and it reversed a bit. I always look on the actuarial basis, not the accounting basis, but in actual fact, the explanations are sort of the same here because it's assets lagging liabilities. It's some of the growth assets that in the second half of the year, didn't match. Interestingly enough, it looks like they have come back a bit in the first half of this year. The other thing I try not to do is get too transfixed by the short-term movements in these things, 'cause it's a long-term, it's a long-term liability. The fact of the matter is, I don't expect the cash outflow in FY24 to be much different, and it may well be that assets and liabilities move around a bit, but the funding plan is set for all of the three big schemes. That's what it was. It had come down a lot in the previous two years. It's reversed a bit. It's still down substantially from where it was 2.5 years ago. Thank you. Sash Tusa from Agency Partners. I wonder if I could just follow up on the question about FMSP contract terms. I was slightly confused. Is HMS Victorious effectively the major element of that, or is it just the... Because I think the contract or the statement that you put out was linked to the HMS Victorious's- Yeah. Victorious, there are several things that take place under FMSP, including submarine refits at Devonport, which is the big activity. It's not the only thing, but it's a kind of, it's a directional thing. Thank you. Your relationship with HII, what triggered that? Is it specifically AUKUS focused, or are there nearer term opportunities you're looking at? Does it tie in, for example, to the work that you've identified as being required in Australia for the Virginia class? There are, they build Virginias, as you know, and they also do decommissioning of nuclear assets. In many ways, they look quite like us, so we've been talking to them about a range of opportunities. The reason the MOU is a bit generic is because there are a wide range of things we can do together. Some of it was getting into the market, so we felt we ought to get it out publicly. There are a wide range of things, some much nearer term than AUKUS. Thank you. Final question, the DSG, or sorry, the contract support Ukrainian. Yeah ... vehicles and equipment. Does that all come through in the current financial year, or is that? The initial element is this year. Mm-hmm. Is that on different terms to the DSG contract? yesish. There are some that flows, yesish. Yes. There's this person behind you who will give you. Good morning, Christopher Bamberry, Peel Hunt. Three questions. Just going back to the cash flow issue, you obviously haven't changed your expectations despite the outperformance last year with the customer receipts. Could you give us a little bit more detail on how you expect to achieve that? Are you getting better, I don't know, upfront payments or whatever, that sort of thing? Yes. We have made progress in the way we approach bidding, execution, and everything else, so across the life cycle. We've still got some way to go. The short answer is yes, we expect to make that up through better performance all the way through the life cycle. ... Secondly, when will you get the first Type 31, when will that be 100% integrated? What's the kind of timeline for that? The in-service date is a customer date, not an our date, because we're only contracted up to the less acceptance date. It's quite difficult to answer that question, 'cause that's in their gift, not our gift. I can't actually remember what the current plan, their plan is. We'll come back to you on what their planned date is. Okay. Thank you. Finally, looking at the pipeline for the next 12, 18 months, what are the major opportunities that, you know, could be awarded that period? Give me an idea as to the scale of some of them. Thank you. Yeah. Well, I actually think the good thing about the near-term growth is it isn't reliant on single big chunks. Yeah, the bulk of it is the extension of existing frameworks or incremental stuff on vehicle support, that kind of stuff. We're not. The only really big multi-billion contract award of new stuff that is potentially around is the FACTS program, which is adjudicated next year. Yeah. And the other point, 'cause I know you're focusing on the near term, is if you look at how much revenue we had in the bag on the April 1, in percentage terms, it's at least what we had a year ago on the April 1. In terms of what's already secured, that's quite a big chunk of that already. Thank you very much. Yeah. Thanks, it's James Beard at Numis. two questions from me, please. The other part of the press release from last week, regarded your win of the, on the maintenance of gifted assets in Ukraine? Sorry, sorry. Yeah. Obviously, you've flagged that that's a sort of initial 1-year opportunity. What's the sort of longer term potential on that? Second question was on submarine decommissioning, 'cause that was something else mentioned in that press release last week. There's sort of initial showing opportunity back in later this year. Is this likely to be a particularly near-term opportunity, or is this going to get sort of pushed further and further out to the right, as has always been the case with UK nuclear submarine decommissioning? I'll do the second one first while I think about the first one. Both nuclear submarine decommissioning and actually conventional civil decommissioning is the jam tomorrow in this business. When I was thinking about joining and I looked at some of the things we were saying, it was always gonna be big stuff. Eventually, people will need to decommission legacy nuclear platforms, whether they are submarines or conventional civilian reactors, but it does always seem to move to the right. We are seeing some activity now on nuclear submarine decommissioning, but I would be surprised if it is something David will be calling out as a delta between 2023 and 2024 when we stand up next year. On Ukraine, I think now that the war has gone for the length of time, it has general support to Western-donated kit is a major issue. I think being involved in that, starting with the UK kit, is important and has opportunities to both grow the depth of the UK support, but also potentially spread that to particularly other smaller NATO nations who may not be able to set up their own support. I think it has sort of depth and breadth opportunity in terms of growth. It's very important we execute the initial phase well. I've met recently with the Deputy Defense Minister of Ukraine and the head of their state industry, defense industry, and getting this working well is a key thing for them. That's important. I think over time, all governments want to transition. Rather than supporting Ukraine directly, they will want, over time, to support Ukraine in doing it, Ukraine placing direct contracts effectively. I think that's kind of war evolution dependent. Thanks. Morning, it's George McWhirter from Berenberg. Just on the pension, what sort of opportunities are you looking at to potentially de-risk that, for example, through a pension buy-in? The second question, just on pension contributions post FY24, can you comment on the size of what you expect that to be? Thank you. Sure. Take the second one first. The deficit contributions for FY24 will be about GBP 65 million, down from GBP 142. You may know this, there are three big pension schemes. We've actually got a number of smaller ones, there are three big ones, we stage the valuations, the triannual valuations, so that no two of them fall at the same time. The kind of market risk, if you like, is spread. There's kind of always one valuation going on at a time. In terms of the de-risking, all the usual stuff is the answer. In terms of buy-ins, buy-outs, that's probably a little way down the track, not all that far, but right now, the best thing we can do. is make sure we've got the right investment strategy, is head towards self-sufficiency, is manage the liabilities with obviously, this is a trustee action, but with us supporting it in consultation. To the extent there are any of the usual liability management actions, we would expect to take those. There will be a point for each of those three schemes in the not-too-distant future, where it would be opportune to do a buy-in or at least look at it. It's market condition dependent, obviously. Sometimes it can be very expensive, sometimes not. There may be that in the not-too-distant future, a window opens up on one of those schemes where we could do something like that. The important change on that, just to reemphasize the point, is if you'd asked that two years ago, the answer would be, that's so far away. You know, it's not gonna be next year, but it's on the horizon. Andrew? Right. We'll just hand over to the conference call line. Operator, please. Thank you, sir. We will now begin questions from the phone line. To ask a question on the phone line, please signal by pressing star and then one on your telephone keypad. We will pause for a moment to assemble the queue. Sir, it would appear we have no questions on the conference line at the moment. We will now hand back to the Babcock team. Okay. Okay. I'll take one question, written question that's come in, from Suhasini Varanasi from Goldman Sachs. It's around medium-term, revenue growth targets we have. Can you talk about the revenue drivers we have here, price versus volume, and what makes you confident about the future prospects given the historical trends? Price versus volume is a very good point. It's also capital employed and risk. I would say that the big drivers at the moment are pushing up availability and upgrades everywhere. Our core goal is to make sure that we get that balance of risk, capital employed, i.e., when we get paid, the cash flow thing David talks about, and margin, right? Particularly in the non-UK markets, we're not, we're not short of opportunities for the moment. In fact, our, our number one challenge is to make sure we can mobilize when we've won. What obviously our number one obligation to all of our customers, which our UK customer knows and F1 knows, is to make sure the UK submarine fleet is fully supported. Sorry, the other part of the question was, there was two-stage. Well, it was just what makes you confident? Yeah. compared to historical trends? Historic trend, but I don't quite know whether you're asking Babcock historic trends or global historic trends. I think from a global point of view, defense markets are at least stable everywhere, if not growing. Whereas historically, we've been working in declining markets, so I think that's probably the biggest positive. David? Yeah, thanks, David Perry. Just two very quick follow-ups on existing questions. The gentleman asked about pipeline opportunities, and one you never mentioned was the Poland frigate. It does feature quite high in your. Yeah. release. Can you just tell me what's going on there? Is it a, you're selling a product, a license? What's the scope and timing? At the moment, we are finalizing discussions for the execution phase. We've currently been paid effectively for license and consultancy. The expectation is we will be involved in Poland in the delivery of the frigates, and the detailed mechanism for that is, should be sorted by the autumn. Okay, thanks. Then just the other clarification from David Mellors. Just a second ago, you said on pension, more than likely to do a deal than two years ago, but not next year. Is next year fiscal, you're saying, not in fiscal 2024 or not in fiscal 2025? I didn't say either of those things, but it certainly won't be in 2024. Yeah. I wouldn't have expected so. I think this is a medium-term thing now, whereas two years ago it was a pipe dream. Just but you weren't ruling out doing something in FY25, March, the year ending March 2025? I'm not ruling out anything. I'm just saying the first thing we've got to do is get the liabilities de-risked and down in order to make it economic before you start talking about buy-ins and buyouts. It's clearly a medium-term thing in each of the schemes. They're all in different places. Maybe I got you too excited. I wouldn't expect anything in the next year except continued de-risking. Thank you. Okay. Right, well, thank you, for your time and attention and questions. Well, I can't remember what day it is, so I can't remember. It's Thursday. Enjoy the second day of the test. Thank you.