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Grim financial news for weapons maker Magnox/Babcock

Times 5th Aug 2020, One of Britain’s main defence contractors has delivered more grim news
for investors after axing its dividend for last year. Babcock said that it
was cancelling the payout for the financial year that ended in March in an
attempt to preserve cash.

In June the company suspended the final dividend
until it had “greater certainty” on the impact of the pandemic.
Yesterday it laid bare the cost of the Covid-19 slump, revealing that
underlying revenues in the three months to the end of June had fallen by 11
per cent.

Underlying operating profit for the first quarter fell by 40 per
cent from last year’s level. Babcock attributed half of the lost profits
to a slide in productivity as the coronavirus outbreak forced it to change
working practices. The remainder was down to the loss of a contract with
Britain’s Nuclear Decommissioning Authority to clean up 12 Magnox reactor
sites and weakness in South Africa and at its land division. Shares in
Babcock fell by 29p, or 10 per cent, to 260p last night.

August 6, 2020 - Posted by | business and costs, UK, weapons and war

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