Babcock wins battle for £1.3bn warship contract

BABCOCK International has fought off major rival BAE Systems in the race to build Britain’s newest generation of warships.

A consortium led by contractor Babcock has been anointed by the Ministry of Defence as preferred bidder to put together five Type 31 frigates – nicknamed the ‘Lidl ship’ after the German budget grocer because they are smaller and cheaper than existing models.

Work on the project will secure some 2,500 jobs and is slated to begin later this year, with the first ships set to be delivered in 2023.

The coveted contract, worth £1.25bn, has particular weight for Babcock, which has had a somewhat choppy 12 months in which it was forced to fend off two verbal attacks from a mystery research outfit called The Boatman Capital and turn down two approaches from Serco.

Investors, reassured by the signals of smoother sailing ahead, sent Babcock shares 1pc higher, up 5.6p, to 543.6p by the close.

Shares in rival defence player BAE Systems – on which the Government is trying to reduce its reliance – were down 0.6pc, or 3.2p, to 571.4p.

Oil behemoth BP lost ground after boss Bob Dudley told a JP Morgan conference that the company plans to cut some of its oil projects and reduce investments in others, in an attempt to reach its climate goals. Its stock fell 1.6pc, or 8.1p, to 504p.

But it was a tough day all-round for oil companies as prices tracked lower, with the value of Brent crude falling 3.6pc to just below $60 a barrel.

It came after a meeting of an expanded alliance of oil-producing nations – known as Opec+ – failed to yield a decision on whether to carry on cutting supply. FTSE 100-listed Shell lost 0.7pc, or 15.5p, to 2283p, while mid- cappers Tullow Oil shed 4.7pc, or 10.7p, to 217.7p and Premier Oil closed 4.9pc lower, down 4.32p, at 84.08p.

Mediterranean-focused oil and gas group Energean fell 4.5pc, or 45p, to 951p after it swung to a loss and cut its guidance for how much oil it will produce in Greece following a temporary shutdown in July.

In contrast, retail investor favourite Hurricane Energy jumped 5.2pc, or 2.34p, to 47.64p, after it reported ‘excellent’ results from a well off the coast of the Shetland Islands.

The FTSE 100 edged slightly higher, closing up 0.09pc, or 6.64 points, to 7344.67.

It was boosted by gains among big miners including BHP – up 1.5pc, or 26.8p, to 1803.8p – and

Anglo American – up 2.6pc, or 49.8p, to 1932.8p – after the US and China called a tiny ceasefire in their large-scale trade war by delaying fresh tariff hikes on each other’s goods. The mid- cap

FTSE 250, however, closed in the red, down 0.10pc, or 19.59 points, at 19,962.57.

JP Morgan sent Premier Innowner Whitbread and Intercontinental Hotels Group lower after it got jittery about the outlook for the European hotel industry.

It slapped an ‘underweight’ rating on both stocks, sending Whitbread down 2.5pc, or 115p, to 4429p and IHG 2.5pc lower, down 130p, to 5037p.

Engineering business Ricardo fell 7.7pc, or 54p, to 648p, after reporting that its unit that serves the car industry struggled last year. Profit before tax fell 1.9pc to £26.5m. Struggling inkjet printer firm

Xaar surged 20.8pc, or 12.3p, to 71.4p after it agreed to sell 20pc of its holding in its 3D printing business to a joint venture partner, US group Stratasys, for £8m. Stratasys also has the option to buy the rest of the 55pc it doesn’t own.

And finally Wetherspoons closed 0.3pc lower, down 5p, to 1550p, ahead of its full-year results today.