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🇬🇧 United Kingdom /Economy & Trade

Babcock says Brexit and Covid beset Royal Navy contract as profits plunge

From The Guardian · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Babcock International's underlying operating profits fell 19% in the year to March.
  • The defense contractor reported a £140 million charge on its Type 31 frigate contract for the Royal Navy.
  • The company blamed Brexit and COVID-19 for problems affecting the frigate-building program.

Babcock International, a major UK defense contractor, reported a significant plunge in annual profits, down 19% in the year to March. The company announced a £140 million charge related to its contract to build five Type 31 frigates for the Royal Navy. This program, which began in 2019, is now making a loss, according to the firm's report.

Babcock attributed the difficulties to a combination of factors, including the impact of Brexit and the COVID-19 pandemic. These external challenges have beset the key contract, contributing to the financial downturn for the defense giant. The company's struggles highlight the complex pressures facing large-scale defense manufacturing.

The firm's financial performance underscores the challenges in delivering complex, long-term defense projects. The reported losses on the frigate program and the overall profit decline signal a difficult period for Babcock International as it navigates economic headwinds and project-specific issues.

Underlying operating profits down 19% with 2019 frigate-building programme making loss, firm reports

— Babcock InternationalReporting on the company's financial performance and contract issues.
DistantNews Editorial

Originally published by The Guardian. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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