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Defence large Babcock sells consultancy for £293m as its battles losses

Job created after MBO at South West construction consultancy

Defense and engineering giant Babcock International Group Plc has sold a marine consultancy firm with offices in Plymouth for £ 293 million while it works on a “turnaround” plan to deal with financial losses.

The company, which operates the shipyards in Devonport, Plymouth, and Rosyth, Scotland, is selling Frazer-Nash Consultancy to KBR, an American engineering giant.

It marks the end of a 14-year partnership between Babcock and the Surrey-based engineering and technology consultancy that emerged from the classic car manufacturer Frazer-Nash.

The consultancy, which is active in the areas of submarine design and naval weapons, among other things, is part of Babcock’s marine sector, which focuses on its operations in Devonport.

It employs around 900 people in the healthcare, energy, defense and transportation sectors. It has nine UK locations including Millfields in Plymouth, Gloucester and Bristol and four in Australia. The company had sales of just over £ 100 million and pre-tax profit of £ 13.5 million for the 2019/20 financial year. As of March 31, 2021, gross net worth was £ 79.9 million. The transaction is subject to approval by the Australian authorities, but Babcock shareholders will not receive a vote on the sale.

In July 2021, Babcock reported an operating loss of 1.64 billion. David Lockwood, chief executive, said the company could turn around without raising cash from shareholders.

Babcock had already announced plans to sell £ 400 million worth of businesses over the next 12 months. The sale of Frazer-Nash Consultancy will fill much of that void and the money will be used to pay down debt.

Mr. Lockwood said, “We are making real progress on our plan to streamline the group and focus on our key markets. Divesting businesses through our targeted divestment program worth at least £ 400million will allow us to reduce complexity and increase our focus while re-empowering Babcock. Frazer-Nash Consultancy is a good fit for KBR and I wish you every success as the company continues to grow. “

Frazer-Nash has its roots in the 1920s when Archie Frazer-Nash founded the automaker of the same name. The company began manufacturing machine guns during World War II and held government contracts after the war. In 1971 the consulting department of the Frazer Nash Group was founded. It was bought by its own management in 1990.

Business Live’s South West Business Reporter is William Telford. William has over a decade of experience reporting on the business scene in Plymouth and the South West. It is based in Plymouth but covers the entire region.

To contact William: Email: [email protected] – Phone: 01752 293116 – Mob: 07584 594052 – Twitter: @WTelfordHerald – LinkedIn: www.linkedin.com – Facebook: www.facebook.com/william. telford.5473

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In July, Babcock announced that sales had fallen from £ 4.42 billion to £ 4.18 billion, with the operating loss still affected by Covid-related issues from the 2020 reported deficit of 75 million must “stay careful”.

Babcock’s oil and gas, aviation and emergency rescue departments have been hard hit by the Covid pandemic and its aerospace impact, and Covid restrictions have delayed work on key contracts. In April, Babcock announced it would lay off around 1,000 and streamline its governance structure, despite union bosses hoping Plymouth would avoid many job losses.

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