£120M HIT FOR DEFENCE FIRM

Defence contractor Babcock’s bid to allay investor fears has failed.

Shares in the £3billion company, which maintains submarines carrying nuclear weaponry, fell further yesterday as it revealed half-year profits slumped 64% to £65million.

Babcock also reported a £120m hit to finances. This included £40m from ‘capacity reductions and restructuring’, including the decision to shut Devon’s Appledore shipyard. The GMB union wants it saved and has urged the yard to build a new Isles of Scilly ferry.

Another £80m came from slashing the value of its helicopter arm that flies 215,000 workers a year.

Shares in Babcock have fallen by a third since June.

Boss Archie Bethel said: “We are taking decisive actions.” Babcock also runs Rosyth Dockyard which worked on the HMS Prince of Wales aircraft carrier.