Interim Results - 6 Months to 30 September 1999

Babcock International Group PLC
18 November 1999


                   BABCOCK INTERNATIONAL GROUP PLC
     Interim results for the six months ended 30 September 1999
                                  
                             Highlights

          * Continued successful progress, with Group operating
            profit, excluding goodwill and operating exceptional
            costs, increasing to £10million (1998: £8.4 million);
            
          * Group profit before tax was £11.9 million (1998: £11
            million) and the corresponding earnings per share was
            6.06p (1998: 5.0p);
            
         * Earnings  per share excluding the exceptional profit on
            disposal of fixed assets was 5.6p (1998:5.0p) and an
            interim dividend of 0.9p (1998: 0.8p) will be paid;
            
         * With strong net cash position of £68.9 million (1998:
            £35.8m) the Group continues to evaluate potential
            acquisitions with good strategic fit;
         
         * Group order book increased to £382m (1998: £271m);

         * Both divisions (BES and BMH) continued to make good
         progress;
            
         * The Chairman Dr T John Parker said 'The risk profile of
            the Group and its portfolio of businesses have been
            transformed and excellent progress has been achieved on
            improving operating margins and returns on capital
            employed.  Increased focus is now being placed on adding
            new revenue streams via organic development and
            acquisitions.  The Group strategy has the potential to
            continue delivering future improvements in shareholder
            value.'
            

Contact:  Dr John Parker, Chairman
          Babcock International Group PLC
          Telephone: [phone] (until 5.30pm)
          Thereafter: 01494 727 296

          Ginny Pulbrook
          Citigate Dewe Rogerson
          Telephone: [phone]

                                  
                        Chairman's statement
                                  
                                  
                                  
Results

I am pleased to report that the Group has had another successful
first half year with good progress being made by both Divisions.
Group operating profit, excluding £2.2m of exceptional costs for a
redundancy programme in Railcare, its rail venture with Siemens,
increased strongly by 14.5% compared with the first half of the
previous year.

Group operating profit before goodwill and the exceptional item
referred to above increased in the half year to £10.0m (1998: £8.4 m)
resulting in an operating margin of 4.3% (1998: 3.4%) on turnover of
£233.6m (1998: £250.3m).  The credit from goodwill amortisation in the
period was £1.0m (1998: £1.2m).

Group profit on ordinary activities before tax was £11.9m (1998:
£11.0m) after including the exceptional costs of redundancy and the
exceptional profit on disposal of fixed assets of £0.8m (1998: £ nil)
and interest receivable of £2.2m (1998: £1.0m).

Earnings per share excluding the above exceptional profit was 5.6p
(1998: 5.0p) and after including it was 6.1p (1998: 5.0p).  An interim
dividend of 0.9p per share has been declared by the Board (1998:
0.8p).

The Group order book has remained strong and was £382.3m at September
(1998: £270.5m) compared with £353.2m at March 1999.

The operating cash outflow during the first half was £6.2m compared
with an inflow of £11.0m in the corresponding period last year and
the Group's net cash at the end of September was £68.9m (March:
£82.1m).


 Review of Operations

BES

BES achieved a good trading performance during the first half and
increased operating profits before the cost of the redundancy
programme at Railcare, by £0.6m or 9.6% compared with the
corresponding period last year.  Turnover was lower than for the
same period last year due principally to weaker demand for rail
wheelset and bogey overhaul, a lower level of refit man hours
following the delayed arrival of the aircraft carrier HMS Ark Royal
and the completion last year of the Ministry of Defence ('MoD')
funded nuclear dock infrastructure improvements at Rosyth.

In the Division's naval refitting activities there were further
improvements in performance both in the UK and New Zealand as a
result of continuing cost reduction and efficiency improvement
initiatives.  The two-year refit contracts for the nuclear submarine
HMS Spartan and aircraft carrier HMS Ark Royal that began in the
period are progressing well.  In New Zealand the deployment of the
Royal New Zealand Navy's ships in response to the situation in East
Timor has led to a temporary reduction in naval work.

Within Railcare, performance improvement measures have been pursued
to protect future margins.  Information in connection with the UK
Government's public/private partnership plans to modernise and
upgrade the London Underground system was released recently and is
now being studied and evaluated.  Railcare is also now responding to
enquiries regarding its capability to convert 'swing door' railway
rolling stock to a 'sliding door' configuration for which a
prototype has already been completed.

In the Division's modest sub-sea engineering and supply activities
challenging market conditions continued to prevail although the more
recent substantial increase in oil prices has generated an improved
medium term outlook.

Good progress was made during the period in the Division's strategy
of leveraging off its substantial facilities and skills at Rosyth
with a view to accessing new customers and alternative business
streams.  Initiatives underway to exploit our nuclear engineering
skills include the recent formation of a joint venture between BES
and Studsvik AB, a leading Swedish company in the field of nuclear
waste clean up, to apply the joint skills of the partners to civil
nuclear decontamination and decommissioning opportunities in the UK.

BES' rail freight wagon (Mega 3), with its ability to handle
megatrailers, tank trailers and swap bodies, successfully completed
its UK certification programme which has confirmed its ability to
operate at high speeds of up to 140 kph.  BES will now seek approval
for the wagon to operate in Europe and remains confident that this
concept is being factored into the forward plans of rail freight and
logistics operators as the way ahead to reduce road congestion and
improve the speed of freight movements.

Babcock Defence Systems' bid in February 1999 to supply a new towed
array sonar to the UK Royal Navy for its Type 23 Frigate fleet has
been recently resubmitted following a number of technical changes
required by the MoD.  Further clarifications are being processed and
a final round of revisions is expected before the successful bidder,
from a short list of two, is announced towards the end of the
current financial year.

The consortium bidding for the ten year management contract of the
UK Government's Atomic Weapons Establishment at Aldermaston led by
Babcock and including W S Atkins and Scientific Applications
International Corporation (SAIC) has completed several tough rounds
of bidding and evaluation in the course of the last six months.  No
final decision has been announced by the MoD although this is
expected before the end of the calendar year.  Regardless of the
outcome this contract demonstrates our credentials to participate in
such sophisticated facility management bids to the MoD.  There are a
number of other major facility management opportunities with the MoD
which the Group will pursue over the coming years.  Furthermore BES
will shortly establish a new specialist facilities management
company to exploit a range of skills and software that can be spun
out from Rosyth.  It will aim to serve the more sophisticated end of
the growing facilities management market including in the civil
sector.

BMH

The Division continued to make very good progress with turnover and
operating profits growing by 11.5% and 32.5% respectively compared
with the corresponding period last year.  Total order book at
September was 13.8% higher than a year earlier at £115.6 m.

The importance of BMH's balanced portfolio of businesses and a
flexible and global operating structure was again evident as the
Division responded to new opportunities.  Improved trading
performances were recorded in the period by the Division's pipeline
engineering and marine businesses although the Nordic bio-energy
activities were more subdued.  The South Africa business achieved
modest profitability despite facing depressed markets particularly
in equipment distribution.

Market conditions in some parts of the world are still challenging,
particularly in Latin America and South Africa, and both sales and
order intake in the first half have continued to be led by Europe
and North America.  In Asia, which remains an important market for
BMH, there have been encouraging signs of a revival in demand from
certain of the troubled Asian economies.  Similarly the prices of
certain commodities that are important drivers in BMH's businesses
have shown significant recovery, including crude oil prices which
influence investment levels in pipeline activity.

Key elements of BMH's strategy for organic development include
accessing new business opportunities in adjacent markets and new
product development.  The division has secured contracts in adjacent
markets for grain terminals, grinding and refined building
materials.  In new product development there has been a particularly
strong emphasis on packing and despatch systems, port terminals and
technologies in support of engineered building products.  In
addition the product portfolio has been enriched through license
agreements for special tubular conveying technology.  The Division
has reached agreement to acquire radio frequency drying plant
technology in the USA to enable it to access new markets in veneer
and board drying.  BMH is also placing greater emphasis on long-term
customer support services including modern telecommunications
techniques to monitor plant installations remotely in real time.

Strategy and Prospects

The Group continues to evaluate potential acquisitions which have a
good strategic fit with our existing businesses and which utilise
the Group's international market expertise and in depth knowledge of
a wide range of industrial sectors. We are confident that in due
course we will complete strategic acquisitions at acceptable prices.

Over the past two years we have transformed the risk profile of the
Group and its portfolio of businesses.  We have made excellent
progress on improving operating margins and returns on capital
employed.  Increased focus is now being placed upon adding new
revenue streams through organic growth and acquisition.  Where
appropriate these will be geared to utilising the Group's sizeable
pool of overseas tax losses.  The Group's strategy has the potential
to continue delivering future improvements in shareholder value.

Dr T John Parker Chairman, 18 November 1999


BABCOCK INTERNATIONAL GROUP PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999


Year ended                                    Six months        Six months
                                                   ended             ended
31 March                                    30 September      30 September
1999                                                1999              1998
                                   Before
                                operating     Operating
                             exceptionals  exceptionals Total
                              (unaudited)  (unaudited)(unaudited)(unaudited)
£'000                               £'000    £'000      £'000     £'000

509,413 Turnover including
        share of
        joint ventures            233,600      -       233,600   259,805
13,092  Less: share
        of joint
        ventures turnover                -     -          -        9,467
494,990 Continuing operations    233,600       -       233,600   249,861
1,331   Discontinued operations     -          -         -           477

496,321 Group turnover            233,600      -       233,600   250,338

19,786  Continuing operations       9,953     (2,152)    7,801     8,270
  109   Discontinued operations         -      -          -          178

19,895  Group operating
         profit  before
         goodwill amortisation      9,953    (2,152)     7,801      8,448
2,337   Goodwill amortisation       1,038          -     1,038      1,150
22,232  Group operating
         profit                    10,991    (2,152)     8,839      9,598
   569  Share ofoperating profit
         of joint ventures and
         associates                     -        -          -         404
        Trading profit
       including share of
 22,801  joint ventures
       and associates              10,991    (2,152)     8,839     10,002
6,142  Profit on
       sale or
       termination of
       operations                                          -         -
      -    Profit on
      -    disposal of
      -    fixed assets                                   798         -
28,943 Profit on ordinary activities
       before interest                                  9,637    10,002
2,501  Interest                                         2,223       968
31,444 Profit on
       ordinary activities
       before taxation                                 11,860    10,970
(5,295) Tax on profit on
       ordinary activities                             (2,205)   (2,304)
26,149 Profit on
       ordinary activities
       after taxation                                   9,655     8,666
(637) Minority interests                                  612     (200)
25,512  Profit for the financial
         period                                        10,267     8,466
(3,725) Dividends paid
       and proposed                                   (1,524)   (1,355)
21,787 Retained profit for the
       financial period                                 8,743     7,111
15.07p Earnings per
       share - Basic                                     6.06p     5.00p
14.99p Earnings per
       share - Diluted                                   5.94p     4.97p

BABCOCK INTERNATIONAL GROUP PLC
GROUP RESULTS BY DIVISION
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999 (UNAUDITED)

                                 Group          Group     Share of   Trading
                            operating       operating    operating    profit
                               profit          profit    profit of including
                               before  Group    after        joint     joint
                           operating operatingoperating  ventures   ventures
                   Group exceptionalexceptionalexceptional    and       and
                 turnover      items      items  items  associates associates
                Sept 1999  Sept 1999  Sept 1999Sept 1999 Sept 1999   Sept1999
                     £'000     £'000     £'000    £'000      £'000     £'000

Continuing operations

BES                 123,878   6,886     (2,152)    4,734       -        4,734
BMH                 109,722   4,012       -        4,012       -        4,012
Unallocated costs
 and other
 income                   -    (945)       -       (945)       -        (945)
                    233,600   9,953     (2,152)    7,801       -       7,801
Goodwill amortisation     -    1,038       -       1,038       -       1,038
Total continuing
 operations         233,600   10,991    (2,152)    8,839       -       8,839
Discontinued operations   -      -         -         -         -        -
Goodwill amortisation     -      -         -         -         -        -
Total discontinued
  operations              -      -         -         -         -        -
                    233,600    10,991   (2,152)    8,839       -       8,839



                                                  Share of   Trading
                                                  operating  profit
                                                  profit of  including
                                                     joint     joint
                                            Group ventures  ventures
                                    Group operating   and       and
                                 turnover   profit associates associates
                                Sept 1998 Sept 1998Sept 1998   Sept1998
                                    £'000    £'000   £'000     £'000
Continuing operations

BES                                   151,421  6,280     -     6,280
BMH                                    98,440  3,027     -     3,027
Unallocated costs
 and other
 income                                    -  (1,037)    -   (1,037)
                                      249,861  8,270     -    8,270
Goodwill amortisation                      -   1,158     -    1,158
Total continuing
 operations                           249,861  9,428     -    9,428
Discontinued operations                   477    178     601   779
Goodwill amortisation                        -    (8)   (197) (205)
Total discontinued
 operations                               477    170     404   574
                                      250,338  9,598     404 10,002


BABCOCK INTERNATIONAL GROUP PLC
GROUP BALANCE SHEET
AS AT 30 SEPTEMBER 1999


  As at                                      As at          As at
31 March                              30 September   30 September
   1999                                       1999           1998
                                       (unaudited)    (unaudited)
  £'000                                      £'000          £'000

          Fixed assets
          Intangible assets
   183    Development costs                     64            329
          Goodwill
21,842    - Goodwill                        20,935         23,074
(22,593)  - Negative goodwill             (20,648)       (24,576)

 (751)                                         287        (1,502)
 (568)                                         351        (1,173)
47,824    Tangible assets                   45,135         50,234
          Investments
          Investments in
           joint ventures
     -    - Goodwill                             -          1,518
     -    - Share of
           gross assets                          -          8,503
    -    - Share of
         gross liabilities                      -         (4,952)

     -                                           -          5,069
    558  Investments in
          associates                          558            526
   126    Other investments                    684            134
   684                                       1,242          5,729
47,940                                      46,728         54,790
          Current assets
25,835    Stocks                            26,187         23,704
105,741   Debtors - due
           within one year                 122,712        124,862
77,144    Debtors - due
           after more
           than one year                    74,285         73,191

182,885                                    196,997        198,053
 6,618    Investments                        7,574              -
89,928    Cash and
           bank balances                    76,336         58,674
305,266                                    307,094        280,431
(182,430) Creditors - amounts
            due within
            one year                     (178,304)      (178,937)
122,836   Net current
           assets                          128,790        101,494
170,776   Total assets
           less current
           liabilities                     175,518        156,284
(2,016)   Creditors - amounts
           due after
           more than
           one year                        (2,058)        (8,767)
(32,186)  Provisions for
           liabilities and
           charges                        (30,002)       (25,867)
136,574   Net assets                       143,458        121,650
          Capital and
           reserves
84,660    Called up
           share capital                    84,685         84,656
67,112    Share premium
           account                          67,118         67,111
(25,017)  Profit and
           loss account                   (16,539)       (39,489)
126,755   Equity shareholders'
            funds                          135,264        112,278
 9,819    Minority interests                 8,194          9,372
136,574                                    143,458        121,650


GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES


Year ended                              Six months ended Six months ended
31 March                                    30 September 30 September
  1999                                              1999        1998
 £'000                                       (Unaudited) (Unaudited)
                                                   £'000       £'000

25,512 Profit for
       the financial
       period                                     10,267      8,466
(710) Currency translation
       differences on
       foreign currency
       net investments
       and related loans                           (265)      (506)
24,802 Total recognised
       gains and
       losses relating
       to the period                              10,002      7,960



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS


Year ended                           Six months endedSix months end
ed
31 March                                 30 September  30 September
  1999                                           1999          1998
 £'000                                    (Unaudited)   (Unaudited)
                                                £'000         £'000


105,673   Shareholders' funds
            at start
            of period                            126,755    105,673
     5    Shares issued
           in the period                             31          -
24,802    Total recognised
            gains and
            losses relating
            to the period                         10,002      7,960
(3,725)   Dividends                              (1,524)    (1,355)
21,082    Net movement
           in shareholders'
           funds                                   8,509      6,605
126,755   Shareholders' funds
            at end
            of period                            135,264    112,278

BABCOCK INTERNATIONAL GROUP PLC
SUMMARISED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999

Year ended                             Six months ended Six months  ended
31 March                                   30 September  30 September
 1999                                              1999       1998
                                            (unaudited)   (unaudited)
£'000                                             £'000      £'000

56,136 Cash flow
       from operating
       activities                               (6,177)     10,971
1,350 Dividends from
       joint ventures                                 -      1,350
1,615 Returns on
       investments and
       servicing of finance                       1,075        584
(798) Taxation                                    (644)      (796)
(5,506)Capital expenditure
       and financial
       investment                               (1,419)    (2,880)
16,941 Acquisitions and
       disposals                                (1,994)      4,829
(3,235)Equity dividends
       paid                                     (2,370)    (1,880)
66,503 Cash (outflow)/
       inflow before
       management of
       liquid resources
       and financing                           (11,529)     12,178
  884 Management of
       liquid resources                           (956)        886
(6,240)Financing                                   244      (6,223)
61,147 (Decrease)/increase
       in cash in
       the period                              (12,241)      6,841

The principal component of the cash flow from acquisitions and
disposals is the settlement of the litigation against the Group that
arose following the disposal of a business that was formerly part of
the Group.  This matter was referred to in the Group's 1999 annual
report and financial statements.  The Group has also paid deferred
consideration following the Group's acquisition of  AKI Dryer
Manufacturers (now renamed BMH AKI Dryers Inc.) in September 1998.
Returns on investment and servicing of finance includes the payment
of a dividend of £1.0m to the minority shareholder in the Group's
Railcare operation.



RECONCILIATION OF NET FUNDS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999 (UNAUDITED)

                                                New               At 30
                         At 1 April         finance  Exchange  September
                              1999 Cash flow leases movement      1999
                             £'000  £'000    £'000    £'000       £'000

Cash in
 hand and
 at bank                     89,928 (12,962)    -     (630)      76,336
Overdrafts                   (6,462)     721    -      (16)     (5,757)
                             83,466  (12,241)    -    (646)     70,579
Debt                         (1,399)    (289)    -       5      (1,683)
Finance leases                 (757)      76  (382)      2      (1,061)
                             (2,156)   (213)  (382)      7      (2,744)
Liquid resources               6,618     956    -        -        7,574
                              87,928 (11,498) (382)   (639)      75,409


Notes


1)   The statement of results for the year to 31 March 1999 is an
     extract from the Group's full accounts for the year which have been
     filed with the Registrar of Companies and on which the Group's
     auditors gave an unqualified report.  The accounting policies are as
     stated in the Group's full accounts for the year ended 31 March
     1999.

2)   The charge for taxation has been based on the estimated
     effective tax rate, before (non-operating) exceptional items and
     goodwill, for the year ended 31 March 2000.

3)   Earnings per share is based on the profit attributable to
     shareholders for the half year to 30 September 1999 and an average
     of 169.3m shares in issue in the period.

4)   Based on the first half trading results, the Board has approved
     the payment of an interim dividend amounting to 0.9p per share
     (compared to 0.8p in 1998).  The dividend will be paid on 28 January
     2000 to shareholders registered on 6 January 2000.

Circulation Note

Copies of this interim report are being sent to shareholders on 24
November 1999.  Further copies are available at the Company's
registered office: Badminton Court, Church Street, Amersham,
Bucks HP7 0DD.