Babcock International shares slide on profit plunge

Babcock International (BAB.UK) stock plunged over 8.0% early in the session after the U.K. engineering group posted a drop in pretax profit after the pandemic caused higher costs than expected and negatively affected  trading in its civil aviation businesses. Statutory pre-tax profit declined to £55.3m from £152.5m in 2019, revenue of £2.1bn was down 4% and underlying operating profits of £143.1mln were down from £250.6mln a year ago. Statutory operating profit was 55% lower than last year at £76.2m

Chief executive officer David Lockwood said that while demand for its critical services has remained resilient overall, the additional costs incurred and inefficiencies created by the pandemic have impacted profitability.
"Our operating profit performance in the first half reflects this Covid-19 impact as well as disposals, the impact of government insourcing of Magnox and Dounreay, and weak trading in civil aviation," he said.
"In the coming months, we will be reviewing our strategic priorities, execution and delivery. I look forward to reporting back on this in May. In the meantime, we remain focused on delivering for our customers, employees and shareholders and continue to look to the future with confidence."
Babcock International did not provide financial guidance for this year due to ongoing uncertainty over the impact of the pandemic on its markets, including government and customer responses.