Babcock International posts £140 million Type 31 frigate charge but shares climb on £200 million buyback

UK defence contractor Babcock International disclosed a £140 million charge linked to the Type 31 frigate programme after unexpected design‑change rework on the first two vessels built at its Rosyth yard. The hit, which includes an estimated £100 million revenue reversal, trimmed headline profit to £293 million, missing analysts’ forecasts.

Despite the setback, Babcode’s shares rose almost 2 percent as revenue grew 10 percent to £5.3 billion, driven by a 34 percent jump in aviation sales and a 14 percent increase in nuclear operations. The company also announced a £200 million share‑buyback, underscoring confidence in its longer‑term outlook. Chief Executive David Lockwood, who will step down at the end of the year, highlighted the firm’s role in supporting the UK’s naval, land, air and nuclear submarine capabilities.

The firm expects the third and fourth frigates, still early in construction, to avoid the rework issues that affected the first two ships.