Babcock flags £1.7B charge after review but unveils turnaround plan
Apr. 13, 2021 12:57 PM ETBabcock International Group PLC (BCKIF)BCKIF, BCKIYBy: Carl Surran, SA News Editor
- Babcock International (OTCPK:BCKIF +43.3%) skyrockets after the U.K.'s second-largest defense contractor revealed a £1.7B ($2.3B) writedown after re-evaluating its contracts and said it would seek to raise £400M from asset sales.
- The writedown exceeds Babcock's market value and was much higher than most analysts expected, but the majority was not in cash, and CEO David Lockwood says he does not need a rights issue to rebuild the company's balance sheet.
- Babcock said it would look to raise £400M from asset sales and simplify its business, leading to the loss of 1,000 jobs, as part of a wider restructuring to turn around the company's performance.
- The company also released preliminary, unaudited results for the full year ending March 2021, showing underlying revenue of £4.69B, slightly lower than the £4.87B for the prior year, and underlying operating profit fell to £307M from £524M before the writedown.