£550m hedge for Babcock

 
Adam Hignett
Babcock has entered into contracts with the Ministry of Defence (Source: Getty)
Engineering support firm Babcock experienced a solid six months, it said yesterday, as strong demand from existing contracts and its bidding and development activities remained buoyant.

The company said it had entered into contracts with the Ministry of Defence for the acquisition of Defence Support Group (DSG), with the associated service provision contract along with output based services expected to be worth £2bn over ten years.

However, Babcock also warned it is seeking using £550m of debt to hedge the European business, a mitigation necessary due to ongoing currency volatility and its exposure of around 65 per cent of its trade carried out in euros.

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