Babcock International has hailed a “new era” for defence as it upgraded its medium-term guidance, increased its dividend and launched its first buyback programme.

Underlying profit for the year to the end of March jumped 53% to £362.9 million against £237.8m in the previous 12 months on an 11% growth in revenue to £4.8 billion, with particularly strong growth in Nuclear and Marine.

The FTSE 100 company has an order backlog of £10.4 billion. It announced plans to buyback £200m of shares. The board is recommending a final dividend of 4.5 pence per share, taking the total to 6.5 pence per share, up 30%.

It said it expects average revenue growth of mid-single digit, underlying operating margin of at least 9% (previously at least 8%) and average underlying operating cash conversion of at least 80%.

Among the company’s highlights was this month’s “major milestone” as the first of five Type 31 Frigates, HMS Venturer, left the assembly hall and entered the water and returned to dry dock for fit out in Rosyth. Shares in the company have been trading at a 10-year high and closed today up 119p (11.52%) at 1152p after hitting a new intra-day high of 1176p.

David Lockwood, chief executive, said: “This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth.

“Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers.”