Babcock reports 140 million pound charge on Type 31 frigates

Babcock International, a major FTSE 100 defence contractor, reported a 140 million pound charge on its Type 31 frigate programme for the Royal Navy, attributing the financial hit to late-stage design changes and higher-than-expected rework costs at its Rosyth shipyard in Fife.

The company disclosed the impairment in its annual results for the year ended March, stating that remedial work on the vessels proved more expensive due to its timing late in the construction process. The charge includes about 100 million pounds in revenue reversal based on revised estimates for programme completion costs. Babcock is building five frigates under the contract, with the first two having been floated for the first time after approximately four years of construction. The third and fourth ships remain in earlier stages and face lower exposure to these issues, while the fifth is also progressing ahead of final assembly.

The Type 31 vessels will bolster the Royal Navy's surface fleet, supporting missions such as maritime security, intelligence gathering, humanitarian aid, and countering illicit sea-based activities. Despite the setback, Babcock recorded overall revenue growth, fueled by stronger...