Brexit tax hit for Babcock
Engineering group Babcock, which specialises in aerospace and defence. is to take an additional one-off £10 million tax hit due to Brexit.
The restructuring of the group's aerial emergency services business will create the additional cost with costs relating to the new structures expected to be around £10m per year.
Babcock includes the Defence Support Group operation at MoD Donnington, in Telford, and the former Macneillie specialist vehicle conversions business at Aldridge, now renamed Babcock Vehicle Engineering
The firm also said underlying earnings expectations for 2019 remain unchanged, with slightly higher margins offsetting slower revenue growth.
Total revenue is expected to drop to £5.2 billion, compared with £5.36bn in the previous year, due to lower activity in its rail business.
Chief executive Archie Bethel said: "We continue to make good operational and strategic progress and won some great new contracts in the period including an expansion into the aerial emergency services market in North America, a significant win in Australia and securing the next 10 years for our rail business.
"Whilst preparing for the UK exiting the EU and for our QEC and Magnox contracts coming to an end, we continue to grow our business across our three key markets of defence, aerial emergency services and nuclear."
The group's order book and pipeline remains strong at around £32bn, consisting of an order book of around £18bn order book and a £14bn pipeline, which is £1bn higher than last year end.
