- Defence company Babcock delivered a cautious outlook on profit after flagging £1.7 billion of asset writedowns, but laid out a plan to turnaround the company without the need to issue equity.

'We are cautious about progress in FY22 profitability as it will be a year of transition,' the company said. 'We aim to return Babcock to strength without the need for an equity issue.'

'The early results from our reviews show significant write offs and a smaller ongoing reduction in the profitability of the group,' it added.

The contract profitability and balance sheet review (CPBS) was expected to result to cut underlying operating profit by £30 million each year.

Draft unaudited management results estimate FY21 underlying revenue of £4,690 million, down from £4,872 million last year, with underlying operating profit - before CPBS impacts - of £307 million, down from £524 million

The company also set out a plan to streamline its business by selling certain assets, anticipating proceeds of at least £400 million over the next 12 months.

The changes would result in approximately 1,000 job cuts within the next twelve months, but lead to expected realisable annualised savings of £40 million.

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