Chairman's AGM Statement

BABCOCK INTERNATIONAL GROUP PLC
30 July 1999


Contact:  Dr T John Parker
          Executive Chairman

          Nigel Young
          Finance Director
          Telephone: [phone]

          Ginny Pulbrook
          Citigate Dewe Rogerson
          Telephone: [phone]


             Babcock International Group PLC
                 Annual General Meeting
                  Chairman's Statement
                            

'Before proceeding with the main business of the meeting,
I  would like to make a few introductory remarks in order
to  update shareholders on progress since my statement in
the Annual Report'.

'In   the   Annual  Report  I  explained   that   Babcock
International  Group  now possesses  a  strong  financial
platform  from  which  to grow both  organically  and  by
acquisition  and  that  the  year  had  begun  well.   An
increase of £54 m to the Group's overall order book since
March  giving  £407  m at June underpins  our  confidence
going forward'.

'BES  Division, that represents some 60% of Group  sales,
was awarded a contract in May to a value of approximately
£100m  to  refit the aircraft carrier HMS Ark  Royal  and
work  has  now  begun  at the Rosyth  dockyard.   In  the
Division's  rail activities there is a solid  order  book
for   train   refurbishment  and  it  is  expected   that
significant  additional work will be won  in  the  coming
months.  However the weakness experienced by Railcare  in
wheel set and bogey schedule call-off orders last year is
again  repeating  itself and as a result  we  expect  the
trading  performance to follow last years  pattern  of  a
weaker   first   half.  We  are  also  pursuing   ongoing
performance improvement measures in Railcare  to  protect
future  margins and this has involved a recent  reduction
in employee numbers'.

'BMH  Division is now seeing the first encouraging  signs
of  recovery  in  certain  Asian markets  although  South
Africa  and certain South American economies continue  to
be  rather  sluggish.  The success  of  the  Division  in
securing high profile grain terminal orders in Europe and
the  Middle  East  since the year  end  demonstrates  the
importance  of  our  commitment  to  continuing   product
development.  Whilst we expect a number of BMH's  markets
to  remain  challenging this year, we  believe  that  the
Division  is well positioned with an order book of  £133m
at June 1999 (compared to £91m in June 1998) to make good
progress'.

'In  both  Divisions we are continuing to  investigate  a
number of acquisition opportunities where there is a good
fit  with  our  strategic  and  financial  criteria.   In
addition,  we  are pursuing organic growth  opportunities
that   leverage  off  the  skills  of  our   people   and
technology.   These  exciting  opportunities   which   in
certain  cases  demand  a strong commitment  of  internal
resources include our bids in joint venture to manage the
Atomic Weapons Establishment (AWE) at Aldermaston and the
development of the new Sonar system (2087) for the  Royal
Navy's  Type  23 frigate fleet.  Success in  these  major
project  opportunities will further underline the Group's
strategic   shift  towards  Engineering  and   Technology
Services'.

'Against  this background we continue to view  positively
the Group's future prospects'.