- Advertisement -

Babcock shares plummet after profitability review

Babcock shares plunged on Friday after the group reviewed its contract profitability.

Early indications of the review, carried out by PwC, suggest that the company could have “negative impacts on the balance sheet and/or income statement for current and/or future years”.

The review, which aims to be finished in time for full-year results, showed that the total order book for 2020 was down by nearly £1bn.

Operating profits fell from £320m to £202m. Underlying revenue was down by 3% to £3.4bn. Order intake year-to-date was £3.1bn. The group’s order book fell to £16.8bn from £17.6bn.

Chief executive David Lockwood said: “While trading in the third quarter has continued to reflect the challenges of the first half and there remain a number of near-term uncertainties, the fundamental strengths of the group and the opportunities ahead give us confidence for future years.”

Shore Capital analyst Robin Speakman said: “Whilst the trading picture and long-term outlook for Babcock appear as expected, immediate news flow remains challenging.”

Babcock shares are currently trading -15.96% at 221.44 (1204GMT). Shares have fallen 65% over the past 12 months.

Register for our free newsletter

Related Articles