Babcock shares plummeted on Friday after the group considered the profitability of the contract.
Early indications of the review conducted by the PWC suggest that the company could “have a negative impact on current and/or future years’ balance sheets and/or profit and loss statements.
A review aimed at closing in time for full year results showed that total orders fell by around £1 billion in 2020.
Operating profit fell from £320 million to £222 million. The underlying revenue fell 3% to £3.4 billion. Order intake was 3.1 billion pounds from the beginning of the year. The group’s orders fell from £17.6 billion to £16.8 billion.
David Lockwood CEO said: “Third quarter trading continues to reflect the challenges of the first half, with many short-term uncertainties, the basic strengths of the group and future opportunities giving us confidence in the future years.”
Shore Capital analyst Robin Speakman said:
Babcock’s stock is currently trading -15.96% at 221.44 (1204GMT). Stocks have fallen 65% over the past 12 months.
