Babcock International reported rising revenue today from increased defence spending after Russia’s invasion of Ukraine lifted national security up the political agenda.
The FTSE 250 company maintains the UK’s fleet of nuclear submarines. It said today that its role in naval support in the UK and Australin was “growing”, with “an increased operational tempo”. It also supports the “military land assets” gifted by the UK to Ukraine, including Challenger 2 tanks.
Revenue rose 8% to £4.4 billion.
Babcock is in dispute with the Ministry of Defence over who should bear the increased costs of building Type 31 frigates. It confirmed a £100 million charge relating to the row on its accounts for the year, which helped pull annual profit down to £6.2 million from £182.3 million.
It is in resolution talks with the MoD.
David Lockwood, CEO, told The Standard that the process showed its relationship with one of its biggest clients was “mature”, adding: “We’ve managed to keep this very much isolated from everything else. You have contract mechanisms in order to deal with things. That is how grown-up people operate.”
Shares in the company rose 30p to 346p.
