Babcock International (LSE:BAB) PLC shares fell again as the UK defence contractor ‘kitchen-sinked’ its annual results after a shock profit warning in April.
The group which makes and helps maintains Britain’s warships, had already flagged it would take hefty impairment charges for loss-making contracts and charges of £2bn were largely responsible for the £1.72bn loss (£89mln loss) in the year to March 2021.
Underlying profits were down 40% at £222mln, with revenues for the year flat at £4.2bn and an order backlog of £8.7bn.
"We have a plan in place to strengthen the group without the need for an equity issue," said chief executive David Lockwood.
Babcock said it intends to sell assets worth £400mln over the next year and will streamline management on top of 1,000 job cuts already announced.
Higher COVID-19 costs and uncertainty over new variants will also drag on this year, it added, while it has also been hit by the civil aerospace slump due to virus travel restrictions.
Net debt was £772mln at the end of March, with the engineer expecting cashflow to be slightly negative this year.
Shares fell 11% to 271.1p.