(Alliance News) - Babcock International Group PLC on Friday reported a widened loss in its most recent financial year as Covid-19 continues to hobble business.
Shares in the London-headquartered aerospace and defence contractor were down 12% to 269.30 pence each in London on Friday morning.
Pretax loss for the financial year ended March 31 was GBP1.72 billion, widened from GBP88.9 million, with disposals, lost business and Covid-19 having a significant impact, Babcock said.
"The Covid-19 pandemic had a material impact in the year and continues to cause uncertainty across our markets. The impacts in the year were most severe for our non-defence businesses where activity in some cases stopped. The defence businesses saw some interruption and increased costs initially," Babcock said.
Revenue totalled GBP4.18 billion, a fall of 5.6% from GBP4.43 billion a year ago.
Having decided against a dividend in financial 2020, Babcock again did not declare a dividend for the financial 2021.
While activity levels have broadly recovered, the additional costs from operating in a Covid-secure way remain, it noted. These costs, combined with the uncertainty over business interruption from increased cases and potential new variants, mean that Babcock does not currently expect a material boost in profitability from Covid-19 restrictions easing.
Free cash flow will be impacted by the material cash outflows. In addition, the company is still investing in facility and IT upgrades. Therefore Babcock expects free cash flow in financial year 2022 to be significantly negative.
However, the company is implementing its new operating model, which will deliver around GBP20 million of savings in financial 2022, it said.
By Amrit Sahota; newsroom@alliancenews.com
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Babcock (BAB)
