respond more quickly to customer needs. Operationally, we continued to refine our processes and support functions to deliver better services at lower costs for customers. The successful roll-out of our global management information service helped us to deliver for customers by further streamlining and simplifying processes, and improving the quality of management information. Our strong financial performance enabled us to invest in areas such as ship design, autonomy and AI, which are crucial to our customers’ future success. Outlook We anticipate a mix of risk and opportunity ahead. From the relatively new UK government to the forthcoming elections in the USA, Canada and Australia, there is uncertainty not only about defence spending and its strategic direction but also in all areas of the economy amid rising geopolitical tensions. However, as an organisation dedicated to helping customers find ways through complex challenges, we believe we are well-placed to help navigate these complexities and are confident in our ability to support our customers. Our enhanced position on sustainability, alongside our increased focus on engaging with communities, positions us to understand the diverse concerns of all stakeholders. Additionally, our increased profitability will empower us to make the investments needed to help our customers. It is only right, however, to acknowledge the risks that lie ahead. A new ‘cold war’ age is in many ways already upon us, with cyber threats and risks to critical infrastructure already a fact of life. The ability to maintain business continuity is likely to be challenged, and while this means that both BMT and our customers will face greater challenges, our Chief Executive’s statement With our strategic foundations firmly in place, we not only continued to grow the business during the financial year but accelerated that growth, achieving double digit percentage increases in revenue, profit and margin compared to prior year. Because we exist to help navigate some of the most important and impactful engineering challenges of our time, solid performance matters; it gives us the foundation we need to continually increase the scale and positive impact that our products and services deliver. From national security and climate risk mitigation to energy transition and marine biodiversity, we are helping our customers find sustainable solutions to their most complex challenges. Business environment In our biggest market, the UK, performance was strong during the reporting period. A significant highlight was the successful delivery of the first stage of our work as a key supplier and subcontractor to the Royal Navy’s Fleet Solid Support (FSS) programme, but we also saw progress across our UK-focused portfolio. The UK general election in July 2024 delayed some decision-making, and the subsequent change of government affected spending across all government departments, resulting in some slowing of our Q4 orders. However, as the Government’s forthcoming Strategic Defence Review and Industrial Strategy review complete, and other key policy and spending decisions are made, we are confident that we will be wellpositioned in terms of market share going forward. Our Canada defence business performed well during the year, as the government maintained a steady rate of defence spending, and we will closely monitor this with an election due in 2025. In the US, our business is predominantly focused on asset monitoring, sustainment of offshore oil and gas infrastructure, and these areas saw strong demand as customers chose to invest residual cash balances, perhaps buoyed by the prospect of a new Trump administration. Our renewable energy-related services mean that we were also well-positioned for investment in green infrastructure in the US. After several years of challenging trading, our Asia Pacific (APAC) regional business returned towards profit, and we saw new wins aligned to our growth strategy during the reporting year. The publication of both the Australian Defence Strategic Review and Surface Fleet Review was welcome, providing greater clarity and opportunities ahead. But it was our APAC environment business that saw the strongest growth, with significant wins in offshore wind farm development off the coast of Gippsland, South Australia. Our services were also in demand across APAC and beyond as port owners sought to update their assets to meet future needs. Our innovative ship design work was also recognised and highly sought after in the region, one example being the launch of our design for an exciting new 48m service operation vessel. Performance During the reporting period, revenue was £203m, up from £185m in the previous year, representing an increase of 10%. We achieved profit before tax and profit-sharing schemes of £23.8m from continuing operations during the period, up from £14m the previous year, representing an increase of 70%. This enabled us to reward our employee members with a total profit distribution of 92% higher than the amount (on a like for like basis) paid in the previous period. While our broad portfolio of services and capabilities across multiple sectors and geographies gives us the benefit of diversification, we continued to further build resilience by reducing our dependence on a small number of large customers. In this respect, the financial year was a notable success, winning new customers for our wind farm work and in new markets related to our autonomous maritime data collection vessels. Guided by our strategy, we have been decisive in adjusting our portfolio, reaching mutual agreement to exit the UKbased Lateral Naval architects business, a joint venture between BMT and custom yacht builder Oceanco, to allocate our resources to more value-add operations. Once again, we were able to grow while simultaneously reducing the carbon emissions associated with our business during the reporting year, with our goals for reducing emissions and reaching net zero validated by the independent and exacting Science Based Targets initiative (SBTi). People We believe that employee engagement is crucial to our success as an organisation. So, I was delighted that our annual employee engagement survey built further on the high levels of buy-in and commitment recorded last year. Our engagement index increased to 38% (from 32% in 2023), well above that of other organisations within our sectors and geographies. With talent still in short supply, however, there is no room for complacency, so we worked hard during the year to further refine our employee value proposition and strengthen our approach to attracting and recruiting people from outside the organisation. We also delivered on our commitment to furthering diversity and inclusion across the business, closing the gender pay gap and supporting the study of science, technology, engineering, and mathematics (STEM) subjects in schools. We introduced a Leadership Development Programme for all senior leaders, designed to support them in becoming the best leaders for our people, and to lead the growth of the company. Given our focus and reliance on our people, I am pleased to report that, due to the strength of our financial performance, we were able to reward our people with both an employee dividend and a performance-related bonus, totalling £9.8m. Customers Our customers once again demonstrated their longstanding faith in us, awarding us higher value, long-term contracts and inviting us into their decision-making processes as trusted advisers. As just one example of our ability to deliver for our customers, we began work on our largest ever contract – the Royal Navy’s FSS programme – during the reporting period and achieved the preliminary design review milestone on time and to expectations. Customers also benefitted from the internal transformation of our business, which means that we are now placing greater emphasis on project management and delivery discipline. We also completed the implementation of a common organisational design across the group during the reporting period. This not only supports collaboration across the group, but it also provides greater autonomy for our front-line operations, making our teams better able to This has been a very successful financial year, enabling us to invest in the future with confidence. Sarah Kenny, OBE Chief Executive, BMT expertise in areas such as cyber and asset monitoring mean that we will be well positioned to overcome them. Equally, as geopolitical tensions rise and the war in Ukraine continues, we are seeing a shift towards new ways of warfare, from the use of autonomous drones to the wider adoption of AI. Again, our innovative, flexible and technology-led approach can make us a valuable partner for customers. Overall, I believe that our capabilities, strategic approach and the resilience that comes with a diverse but focused business portfolio, mean that we will be well-positioned to seize future opportunities to support our customers during these uncertain times. I also believe that business has a positive role to play in society beyond simple wealth creation. Our innovation, skills and knowledge will help shape a better future. By embedding sustainability into the heart of our business, we are also securing our own future in an uncertain world and helping our customers plot the best path through complex challenges to make a positive difference. 7 BMT Group Ltd | Review of performance 23-24 6
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