In the firm’s half-year financial results, Babcock report that revenue is up 8% with the bulk of that being due to the Type 31 Frigate programme at Rosyth, Scotland.
According to the report published by the firm:
“Revenue grew by 6% led by a ramp up of work on the Type 31 frigate and warship support programmes, and growth in the LGE business. This growth more than offset the impact of the loss of our UK Royal Navy training contract last year and the year-on-year impact of COVID-19, with orders for the ventilators project in the UK contributing last year. Underlying operating profit of £38.9 million includes a £4.0 million year-on-year recovery in COVID-19 related costs compared to HY21, which was particularly impacted by site closures and lower activity levels.
The Type 31 frigate programme is on schedule following the first cut of steel for HMS Venturer at our advanced manufacturing facility in Rosyth. The new infrastructure allows for parallel build and assembly activity free from weather disruption and is nearing completion ahead of first block assembly. The investment across our Rosyth site aims to ensure shipbuilding capability and capacity to support additional future opportunities.”
David Lockwood, Chief Executive Officer, said:
“We are on-track with our turnaround strategy with around £400 million of disposals to bolster our balance sheet announced to date. We will continue to align our portfolio to best support the Group’s capital allocation priorities and future growth. The ongoing implementation of our new operating model means Babcock will be a simplified, more focused Group. We are pursuing a number of important growth opportunities, with significant contract wins in military communications, our first order for an export licence for our Arrowhead 140 frigate as part of the Type 31 programme, and an agreement for potentially significant work in Ukraine, supported by both the UK and the Ukrainian governments.
While our half year results show some recovery from the financial impact of COVID-19, we remain cautious as we are early on in our transformation and as we manage inflationary and supply chain pressures across the business and potential interruptions from COVID-19. However, the Board believes the actions we are taking will enable the Group to take advantage of the many opportunities ahead of us, leading to improved cash generation and profitability in the medium term.”
You can view the figures here.
Where’s the programme today?
Babcock recently unveiled a shipbuilding facility which will be able to build two frigates at the same time. In addition, the firm also unveiled plans to recruit 500 workers for its Type 31 frigate programme as the build of its new state-of-the-art assembly hall, known as ‘the Venturer Building’ is completed at its Rosyth site.
Measuring 147m x 62m x 42m, the Venturer Building will initially be used for the assembly of the Royal Navy’s Type 31 frigates, providing a facility that can support UK and international shipbuilding activity for decades to come.