Aerospace and defense giant Babcock completes sale of power division to M Group Services for £ 50m
- According to Babcock, the electricity sector generated £ 70m in the year to March 31st.
- The company’s sale in 2021 includes the Frazer-Nash Consultancy division.
- Babcock CEO David Rockwood: “This business is perfect for M Group services.”
Babcock International, a defense industry contractor, has completed the sale of £ 50m of its electricity business to M Group Services.
The division, which counts National Grid and Scottish Power Energy Networks as its customers, generated £ 70m in revenue and £ 7m in pre-tax profit over the 12 months to March 31st.
The sale is part of a major restructuring by Babcock this year, including plans to reduce huge debt, reduce bureaucracy and reduce the employment of about 1,000 people.
Restructuring: The sale of Babcock’s electricity business was part of a major restructuring this year, including plans to reduce debt piles and reduce employment for about 1,000 people.
The biggest sale offloaded Frazer-Nash, a consultancy serving nuclear submarines and Royal Navy warships, to US engineering giant KBR for £ 293 million.
The energy division, which provides offshore oil and gas crew services, was also sold for £ 10 million, and private equity house Equitix Investment Management agreed in September to buy shares in Air Tanker Holdings, the owner of a military refueling jet. did.
Babcock said he hopes to raise at least £ 400m from the sale of these various assets when he announced a strategic review of the business in April.
“We are pleased to continue to make real progress in realizing our plan to streamline the Group,” said CEO David Rockwood today.
“This business is perfect for M Group services. We hope they will succeed as they continue to expand their business.”
Babcock’s announcement came about two weeks after reporting a profit of £ 54.2m in the six months to the end of September, compared to a huge loss of £ 832.5m in the same period in 2020. I will.
The turnaround strategy may have led to stronger performance, but the results also reflect the company’s increased revenues in its nuclear and marine divisions and huge new contracts.
The largest contract the group has won will run until March 2026 and will be a £ 3.5 billion contract from the Ministry of Defense to support the Royal Navy’s future maritime assistance program, including work at the Naval Bases in Clyde and Devonport. was.
In addition, it has won a € 500 million contract for defense aviation training activities in France, providing tactical communications with the British Army and supporting defense high frequency communications services.
Babcock finished half a year with a record £ 10.9 billion contract backlog, but has since secured further contracts with the Australian Government, MoD’s Defense Technology Training College and others.
The company’s stock rose only 0.6% to 320.7p just before noon today, but in 2021 its value increased by about a fifth.
Babcock Completes £ 50m Sale of Power Division to M Group Services
https://www.dailymail.co.uk/money/markets/article-10342069/Babcock-completes-50m-sale-power-division-M-Group-Services.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 Babcock Completes £ 50m Sale of Power Division to M Group Services