© UK MoD Crown Copyright 2017

Three years after coming under fire from activist short sellers, the defence engineering contractor Babcock has warned that a contract audit may result in write-offs.

Early indications from the review, supported by an independent accounting firm, “suggest that there may be negative impacts on the balance sheet and/or income statement for current and/or future years,” Babcock said. The company, which in September appointed new chief executive David Lockwood, aimed to have the audit completed in time for full-year results due in May.

Trading in its fiscal third quarter showed no improvement on the first half of the year, Babcock added. Weakness in civil aviation and Covid-19 disruption meant underlying revenue for the nine months ended December was down 3 per cent at £3.4bn.

“Uncertainty remains around the outturn for this financial year, especially given that our fourth quarter is historically our strongest and that the Covid-19 situation has worsened in most of our markets. Given this uncertainty, and the start of our review of contract profitability and balance sheet, we continue not to provide financial guidance for this financial year,” the company said.

Briefly

A former Petrofac employee has admitted to additional charges under the UK Bribery Act, the Serious Fraud Office said. David Lufkin, Petrofac’s former global head of sales, pleaded guilty to three counts of bribery relating to payments made between 2012 and 2018 that were to influence the award of contracts to Petrofac in the United Arab Emirates worth around $3.3bn, the SFO announced. Petrofac said it continues to engage with the SFO and reiterated that no charges have been brought against any group company or any other officers or employees.

British American Tobacco said the SFO had closed an investigation into “suspicions of corruption in the conduct of business by the company, its subsidiaries and associated persons,” which was announced in August 2017. The SFO will be taking no further action in respect of this matter, BAT said.

Software maker Aveva said in a trading update for its third quarter to December that it remains confident in the full-year outlook. Organic constant currency revenue growth in the quarter was over 26 per cent, driven by “a significant number of scheduled subscription renewals”, and the order pipeline for the remainder of the fiscal year is “solid,” it said.

Warehouse park operator Segro said it had collected 98 per cent of all rents for 2020.

Indivior, the maker of opioid addiction treatments, said results for the full year 2020 will be ahead of previous guidance. Net revenue is now expected to be in the range of $645m to $650m thanks to growing sales of its recently launched Sublocade treatment and the relative resilience of legacy product Suboxone, the company said.

Aerospace engineer Meggitt said full-year results would match the targets given in a November trading update.

The UK market’s strong start to the year has brought out the sellers, with at least three hefty share placings overnight. Clipper Logistics founder and chairman Steve Parkin was looking to raise around £6.5m by selling an 11 per cent stake in the retail logistics group. Meanwhile, unidentified institutions were selling significant stakes in packaging makers DS Smith and Hilton Food.

Job moves 

Ladbrokes owner Entain is in advanced talks to appoint Jette Nygaard-Andersen as its next CEO, Sky News reports. Ms Nygaard-Andersen is already an Entain non-executive director. Her potential appointment follows the surprise resignation this week of CEO Shay Segev.

Hammerson chief financial officer James Lenton is quitting the shopping centre developer just over a year after his appointment. His exit follows Hammerson last year bringing in Rita-Rose Gagné and Rob Noel as CEO and chairman respectively, as well as its completion of a rescue rights issue and the sale of its VIA outlet mall joint venture.

Beyond the Square Mile 

Commerzbank suspended coverage of companies tracked by analyst Heike Pauls © FT montage; Bloomberg, Reuters

Commerzbank suspended coverage of companies tracked by Heike Pauls, its former Wirecard analyst, after it emerged on Thursday that she had briefed executives of the disgraced payments provider about criticism that a hedge fund had shared with her. The Commerzbank analyst was one of the more bullish among those covering Wirecard, which collapsed last June in one of Germany's biggest postwar accounting frauds.

BlackRock’s assets under management swelled to a record $8.68tn in the fourth quarter and chief executive Larry Fink said he expected the momentum to continue in 2021 on the back of robust recovery in the global economy. Robust financial markets anticipating a strong economic recovery this year helped the world’s biggest fund manager eclipse revenue and profit forecasts for the fourth quarter.

Delta, United and American Airlines are refusing to allow passengers travelling to Washington next week to pack firearms in their checked luggage, citing safety concerns ahead of the inauguration of Joe Biden. Southwest Airlines is now the largest US carrier still allowing all passengers to carry weapons in their checked baggage but the Dallas-based airline said it was considering a temporary change to this policy.

Essential comment before you go

Punks on King’s Road, London, in 1983. Youth tribes adopted Docs as symbols of independence from authority © PYMCA/Universal Images/Getty

John Gapper
Potential investors in Dr Martens’ IPO were this week promised that the “canvas for rebellious self-expression across generations” has plenty of room to grow. But our business columnist says the venerable brand has lost its innocence.

Lombard
Thursday was pretty tough for Aim-listed Blue Prism, the software company. Shares fell by a quarter in response to full-year results that came with a warning. The company had been considering a secondary listing in the US but any more days like yesterday and that plan could stall.

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