Babcock says Brexit and Covid beset Royal Navy contract as profits plunge

Babcock International reported a 19% decrease in underlying operating profits for the year ending March, attributing significant financial challenges to its contract for building five Type 31 frigates for the Royal Navy. The company disclosed a £140 million charge related to this program, which has been impacted by a combination of factors including Brexit and the COVID-19 pandemic. These external pressures have contributed to the frigate-building program operating at a loss, according to the firm's annual report. The defence contractor, one of the largest in the UK, experienced a substantial decline in its annual profitability, with the Type 31 frigate contract emerging as a primary source of financial strain. The company's statement highlighted a catalogue of problems that have beset the key Royal Navy contract, leading to the sharp fall in profits.