Babcock hits back against ‘malicious’ MoD claims

Report alleged a ‘terrible relationship’ with ministry

Fife-based defence supplier Babcock International has hit out at “false and malicious” claims made in a highlycritical report by a mystery analyst as it moved to assure over its financial health.

The engineering group – the Ministry of Defence’s second largest contractor – insisted it “continues to enjoy a healthy financial position” following steep falls in its share price after a research paper posted last month by a firm called Boatman Capital.

Babcock, which has a dockyard in Rosyth, said it “strongly refutes” claims made in the report by the “anonymous and so far untraceable” Boatman.

“The group continues to seek to discover who is behind Boatman Capital,” it added.

The Boatman report alleged Babcock has a “terrible” relationship with the Ministry of Defence (MoD), while it also claimed Babcock has “systematically misled investors by burying bad news about its performance”.

It also launched a scathing and personal attack on Babcock’s bosses – chairman and defence industry veteran Mike Turner, and chief executive Archie Bethel – claiming they are “not up to the job”.

Shares were sent tumbling after the Boatman report, with the stock remaining under pressure.

In a vote of confidence in Babcock, a government spokesman said: “We monitor the health of all of our strategic suppliers, including Babcock, and remain committed to working with them on a wide range of programmes.

“Babcock plays a key part in equipping our world-leading armed forces and the MoD spent more than £1.7 billion with the company last year, supporting thousands of jobs across the nation.”

Babcock said it was delivering 128 contracts for the government, with “future opportunities continuing to form a key part of our bidding pipeline”.

Last week Babcock’s Rosyth dockyard was given a vote of confidence as it seeks to secure further work beyond a contract to assemble Royal Navy aircraft carriers.

Babcock announced a year ago that around 250 jobs in Fife would go after reviewing its operations.

A few months later, another 150 staff were axed as energy and marine operations were combined on site.

However, Sir Simon Lister, the management director of the Alliance Management Board, said he saw no reason why Roysth would not be in line for further work after a “job well done” on the aircraft carriers.

Babcock said earlier this month it would close Appledore shipyard in Devon and offer relocation to 199 employees.

The Boatman research report had cited threats to the future of Appledore.

Babcock will publish half year results on November 21.

Babcock’s shares rose 15.80pp to close at 616.20p.

Picture: Steven Brown. Babcock’s premises in Rosyth.