ENGINEERING and support services giant Babcock, which operates the Rosyth dockyard and the Faslane base in Scotland, said its new financial year had started well.

Its order book has remained stable at £12 billion, with all business units maintaining "high activity levels" meaning 80% of anticipated revenue in the year is already contracted.

The general economic climate and the financial constraints of customers were said to be benefiting Balfour as the conditions created "long-term outsourcing opportunities" for it to capitalise .

Its bid pipeline for new work was steady at £15.5bn.

The company indicated the tenders it has in progress plus any new opportunities it plans to bid for would be its key growth drivers in coming years.

Babcock, which reported a 16% hike in underlying profits to £317.8 million in the 12 months to March 31 this year, said it was well positioned for the full year with a "robust financial position" and strong cash generation across the business.

In January this year the Rosyth dockyard won a contract worth more than £30m to build subsea structures for oil fields to the west of Shetland.

That started in March with the work, which preserved around 100 jobs, running for three years.

More than £6m of sub-contractor work is also up for grabs during the project.

Last month the 750-tonne control tower of the HMS Queen Elizabeth, the UK's biggest aircraft carrier, was lowered onto its deck at Rosyth moving the vessel closer to completion.

Babcock's shares closed down 8p at 1176p.