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.

The Gym Group shares opened higher on Friday after the group shared a trading update for the year ended 31 December 2020.

The company, which owns 184 low cost gyms, revealed total revenue to fall from £153.1m in 2019 to £80.5m as it lost 45% of the trading days in the year amid government restrictions.

The Gym Group has started talks with lenders. It said in the update: “Given the ongoing impact from the latest lockdown and its implications for the operational reopening of our gyms, we have started discussions with our lending banks, who continue to be supportive, to review the future covenant tests relating to this facility.”

The company’s memberships fell from 794,000 to 578,000. All memberships have been frozen so that members do not pay whilst the gym is closed.

Richard Darwin, the chief executive, commented: “2020 has been a challenging year for our business, our members and our colleagues. Through the outstanding work of our team we provided a COVID-secure exercise environment for our members and demonstrated the resilience of our business model by trading profitably when gyms have been open.

“Our cash management during the pandemic has ensured we ended 2020 with manageable levels of debt and significant liquidity. At a time when health and fitness has never been more important to the nation, we are ready to emerge from the pandemic and take advantage of the many opportunities available us.”

Despite the difficult year, the Gym Group opened eight new sites last year and is onsite with a further three sites in York, Sydenham and Cambridge.

The group said that it “continues to see an opportunity to access excellent new sites at attractive rents; we are building a strong pipeline for 2021 and beyond and we will continue to progress new leases during this current period of lockdown. We will determine the timing of the rollout programme once there is greater visibility about a reopening date for gyms.”

The Gym Group shares are trading +1.66% at 221,61 (1007GMT).

Boohoo sales surged 40% to £661m in the four months to 31 December.

The group is seeing strong sales over the pandemic and more people turn to online shopping as high street stores close.

The surge in sales is despite the poor working conditions for employees in the UK and abroad. An investigation by the Guardian found that Boohoo factories in Leicester were not paying workers the minimum wage.

The online retailer has hired Leveson to “bring transparency and independence” to their “agenda for change”. In today’s comments on the Agenda for Change, Leveson said: “It is clear that there is a long way to go.”

Following the strong peak trading performance, Boohoo revenue growth for the financial year to 28 February 2021 is expected to be 36% to 38%, ahead of our previous guidance of 28% to 32%.

John Lyttle, Boohoo chief executive, commented: “I’m delighted with the Group’s performance over the peak trading period. Our team worked exceptionally hard in 2020 as we navigated the many challenges, including the COVID-19 pandemic and the successful acquisitionand integration of Oasis and Warehouse.

“Growth has been strong across our multi-brand platform and we have continued to grow our market share across all geographies. I’m pleased to be able to provide a further update on our Agenda for Change programme today, which demonstrates our ongoing commitment to transparency as we invest in our approach to sustainability and our supply chain for the benefit of all of the Group’s stakeholders. The Group is in an excellent position entering 2021, which we expect to be another year of progress towards our goal
of leading the fashion e-commerce market globally.”

Boohoo shares (LON: BOO) are trading -3.47% at 339,00 (0937GMT).

The UK GDP fell 2.6% in November’s second national lockdown.

In what could be the first step towards a double-dip recession, the economy was halted and the six consecutive months of growth have come to an end.

Whilst the economy may have shrunk, it is not by as much as the 5.7% that economists had expected.

“Following six consecutive monthly increases, including an upwardly revised 0.6% increase in October, real gross domestic product (GDP) fell by 2.6% in November 2020,” said the ONS.

“Restrictions were in place to varying degrees across all four nations of the UK during November.”

The new statistic show that the economy was 8.5% smaller in November than it was in the month before the pandemic.

The biggest fall was in the service sector. As pubs and restaurants closed, the sector shrank by 3.4%. Production was down 0.1% whilst construction grew by 1.9%.

The ONS commented: “There were falls in output in all 14 services sub-sectors between October and November 2020. The largest contributor to this fall was accommodation and food service activities, followed by wholesale and retail trade, other service activities and arts, entertainment and recreation, because of the reintroduction of restrictions in some parts of the UK. These four sectors accounted for nearly 80% of the fall in services.”

Rishi Sunak commented on what the new GDP figures meant for the country: “It’s clear things will get harder before they get better and today’s figures highlight the scale of the challenge we face.

“But there are reasons to be hopeful- our vaccine roll-out is well underway and through our Plan for Jobs we’re creating new opportunities for those most in need. With this support, and the resilience and enterprise of the British people, we will get through this,” he added.

Douglas Grant, is the Director of Conister, part of AIM listed Manx Financial Group. He commented on the new GDP figures: “While the economic contraction in November was expected as most of the UK entered a second lockdown, the drop in output is still a cause for concern for many businesses and reflects the dire situation that they are now facing. We must now ensure that the financial security of those businesses that are sustainable can flourish in the future.

“Up until now, the BBLS and CBILS have performed a fundamental role in keeping many SMEs alive and acted as an important triage system to identify and support qualifying businesses needing credit. However, we believe that we have now passed this phase and we must recognise that many businesses will not survive this pandemic, particularly those with an unsustainable debt burden. It is imperative for the future that we now focus on identifying and protecting our most resilient business sectors.”