# Babcock takes £140m hit from reworks to new Royal Navy warships

By Russ Mould — 2026-05-13

Russ Mould, investment director at AJ Bell, said: “Having stormed ahead for much of the past 18 months, Babcock’s share price has taken a pause for breath in recent weeks, but its latest update has helped to restore momentum.

“Investors were prepared to look past a charge relating to a Royal Navy contract, agreed in 2019 at a fixed price and where costs have escalated, to focus on the unchanged guidance for the current financial year and a new £200 million share buyback.

“This provision means the full-year results are likely to be late which can spook the market, but Babcock has given plenty of detail on its financial performance in its pre-close trading statement, so investors don’t feel like they’re in the dark.

“Thanks to its relevant expertise, Babcock is benefiting both from increased spending on defence but also from a growing focus on nuclear power.

“One area of concern for the business may be the growing use of drone warfare and a suggestion this might render some expensive military kit obsolete, but there is little sign of that yet in Babcock’s order book which remains healthy.”

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