One of Britain’s main defence contractors has delivered more grim news for investors after axing its dividend for last year. Babcock said that it was cancelling the payout for the financial year that ended in March in an attempt to preserve cash. In June the company suspended the final dividend until it had “greater certainty” on the impact of the pandemic. Yesterday it laid bare the cost of the Covid-19 slump, revealing that underlying revenues in the three months to the end of June had fallen by 11 per cent. Underlying operating profit for the first quarter fell by 40 per cent from last year’s level. Babcock attributed half of the lost profits to a slide in productivity as the coronavirus outbreak forced it to change working practices. The remainder was down to the loss of a contract with Britain’s Nuclear Decommissioning Authority to clean up 12 Magnox reactor sites and weakness in South Africa and at its land division. Shares in Babcock fell by 29p, or 10 per cent, to 260p last night.
Times 5th Aug 2020 read more »