Babcock International is to plunge £1.4 billion into the red after new management at the defence contractor wrote down the value of the company and the profitability of its contracts. In an unscheduled statement a few weeks before a planned update on a review of the business, Babcock said it had “identified impairments and charges totalling approximately £1.7 billion”. That will come on top of profits from operations plunging more than 40 per cent to £307 million from £524 million. The review was ordered after a changing of the guard at the company last year with the departure of its chief executive, the long-serving Archie Bethell, and his finance director Franco Martinelli, which followed increasing frustration and criticism of a company that has continually disappointed investors. They were replaced by David Lockwood and David Mellors who had become available after their previous employer, the aerospace company Cobham, was taken over. Babcock is a crucial Ministry of Defence contractor, operating the Devonport naval dockyard at Plymouth, building Royal Navy warships at its Rosyth yard near Edinburgh and key supplier into the supply chain building the country’s new generation of nuclear submarines.
Times 13th April 2021 read more »