Babcock International Group PLC Trading update (7819L)
January 15 2021 - 2:00AM
UK Regulatory
TIDMBAB
RNS Number : 7819L
Babcock International Group PLC
15 January 2021
15 January 2021
Babcock International Group PLC (Babcock or the Group)
Trading update
Babcock, the aerospace and defence company, issues the following
trading update for the first nine months of the financial year
ending 31 March 2021.
Group trading
Trading in the third quarter saw a continuation of trends in the
first half of the year, with weakness in our civil aviation
businesses and a negative impact from COVID-19.
Underlying revenue in the nine months year to date (YTD) was
GBP3,399 million (9M 2020: GBP3,574 million), down 3% on last year
excluding disposals and FX. Underlying operating profit in the nine
months YTD was GBP202 million (9M 2020: GBP320 million), down 34%
excluding disposals and FX, with a negative impact from civil
nuclear insourcing, COVID-19 and civil aviation.
Order intake YTD was GBP3.1 billion with the Group's order book
standing at GBP16.8 billion at 31 December 2020 (31 March 2020:
GBP17.6 billion).
Balance sheet
The Group's net debt(1) (excluding lease obligations) at 31
December 2020 was GBP1,207 million, a reduction of GBP255 million
compared to 31 December 2019(2) . Although this position is higher
than that reported at 30 September 2020 of GBP871 million, it is
consistent with the average net debt for the first nine months of
this financial year of GBP1,222 million(3) .
Review of contract profitability and balance sheet
We have recently started a detailed review of our balance sheet
and contract profitability. Early indications suggest that there
may be negative impacts on the balance sheet and/or income
statement for current and/or future years. This review is being
supported by an independent accounting firm and the outputs will be
reviewed by our auditor (PWC), Audit Committee and Board prior to
the publication of our audited results for the year ending 31 March
2021 expected in May.
Outlook
Uncertainty remains around the outturn for this financial year,
especially given that our fourth quarter is historically our
strongest and that the COVID-19 situation has worsened in most of
our markets. Given this uncertainty, and the start of our review of
contract profitability and balance sheet, we continue not to
provide financial guidance for this financial year.
Review of strategic priorities
We announced a review of the Group's strategic priorities in
November 2020 and this is now well underway. Our focus throughout
this review will be on cash delivery, being a strategic partner to
the UK Government, international growth, driving innovation across
the Group, and transforming our ESG and people agenda. We will
outline our refreshed strategy alongside our full year results.
David Lockwood, CEO said:
"While trading in the third quarter has continued to reflect the
challenges of the first half and there remain a number of near term
uncertainties, the fundamental strengths of the Group and the
opportunities ahead give us confidence for future years and I look
forward to reporting back at the full year results".
For further information please contact:
Babcock International Group PLC
Simon McGough Kate Hill
Director of Investor Relations Group Director of
Communications
Tel: +44 (0)7850 978 741 Tel: +44 (0)20 7355 5312
FTI Consulting
John Waples / Nick Hasell / Alex Le May
Tel: +44 (0)20 3727 1340
Notes
1. Net debt includes the benefit of ongoing receivables
factoring and supply chain finance programmes.
2. This includes net proceeds from the sales of Context,
Holdfast and Conbras of GBP194 million.
3. Based on the average of nine month end positions.
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END
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