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Babcock rail arm loses £4.7m despite group posting record results

Engineering support services firm Babcock International’s rail division has revealed an operating loss of £4.7 million for the first half despite achieving record results for the group overall.

Pre-tax profits for the group jumped 30 per cent to £50.9 million in the six months ended 30 September 2008 from £39.2 million for the same period last year.

Turnover climbed 40 per cent to £940.6 million compared to £672.6 million in 2007.

But despite revenues at its rail division being up 15 per cent for the first half to £113.7 million from £98.6 million in 2007, it recorded an operating loss of £4.7 million increased from losses of £2.7 million the previous year.

The firm said: “The projects business has adversely impacted the division’s results for the first half as a result of a number of underperforming contracts.

“We have now withdrawn from bidding any multi-disciplinary contracts and are closely managing the run out of existing contracts. This should allow us to reverse the poor financial performance during the second half.”

The firm’s order book currently stands at a record high of £5.2 billion up 55 per cent from £3.3 billion in 2007.