Restructure charge sees profits slide at Babcock

Engineering group Babcock International, a major employer at sites including Faslane and Rosyth, has revealed a 64 per cent plunge in half-year profits and warned over nuclear decommissioning income.

The group, the Ministry of Defence’s second-largest contractor, reported pretax profits falling to £65.1 million in the six months to 30 September, down from £181.9m in the previous period.

Profits were pushed lower by a £120m charge related to the restructuring of its oil and gas business and included costs such as its decision to sell the Appledore shipyard in Devon. Underlying profits rose by 2.5 per cent to £245.5m.

Babcock predicted “low single-digit” growth in underlying organic revenues for the full year, but cut its 2019-20 guidance for revenue from its JV for decommissioning Magnox nuclear sites in the UK.

Chief executive Archie Bethel said that the group’s “decisive” actions “will deliver benefits next year and beyond”.