Business
Business update
Business update.
About this update from Babcock International Group Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 2664V\n Babcock International Group PLC\n 13 April 2021\n \n \n \n \n Business update\n \n \n 13 April 2021 This announcement contains inside information\n \n \n \n \n \n Babcock International Group PLC (\"Babcock\" or \"the Group\") issues the following update for the financial year ending 31 March 2021 (FY21) including an update on reviews currently taking place and our headline unaudited results. This announcement is being made ahead of the Group's Preliminary Results announcement to provide some early transparency on key issues. \n \n \n \n \n \n Key points\n \n \n Note: these are subject to the finalisation of our reviews and the year end audit\n \n \n · \n Babcock will focus on being an international aerospace, defence and security company with a leading naval business and providing value add services across the UK, France, Canada, Australia and South Africa\n \n \n ·\n The contract profitability and balance sheet review (\"CPBS\") has identified impairments and charges totalling approximately £1.7 billion \n \n \n · \n The vast majority of the impact of the CPBS is one-off in nature and non-cash affecting\n \n \n · \n The CPBS is expected to result in an ongoing reduction in Group underlying operating profit of approximately £30 million each year\n \n \n ·\n We are changing our operating model to simplify the business and reduce layers. The consequential restructuring will have a one off cash cost of approximately £40 million and is expected to deliver realisable annualised savings of approximately £40 million. The benefit in FY22 will be roughly half this due to timing\n \n \n ·\n We will rationalise the Group's portfolio by divesting certain businesses. We anticipate this will generate proceeds of at least £400 million over the next twelve months\n \n \n ·\n Draft unaudited management results show FY21 underlying revenue of £4,690 million (FY20: £4,872 million) with underlying operating profit of £307 million (FY20: £524 million) before CPBS impacts. These results include our share of joint ventures and associates (note 1)\n \n \n · \n Net debt (excluding lease obligations) at 31 March 2021 was £750 million, with an estimated net debt to EBITDA ratio of 2.5 times\n \n \n ·\n We have confidence that the markets we address and our capabilities to address ...