Babcock suffers from UK row with Saudis
Wednesday 24 April 1996
Babcock said the losses would be more than offset by pounds 21m of exceptional gains, principally from the sale of its Renfrew-based energy business, leaving a profit of pounds 3m for the year to March. But the trading losses are a big setback after two years of a three-year recovery programme led by new management and their size dismayed analysts. One said: "This is obviously absolutely dismal. Everyone saw the company in March and this level of problem was not indicated then. It means that 1995 and 1996 profits will be decimated."
Nick Salmon, the chief executive who is trying to turn the group around with chairman John Park, said the Saudi losses would be less than half the pounds 18m.
The company had been unexpectedly turned down for a big project in Saudi Arabia, thought to be a pounds 70m deal to build a petro-chemicals plant for Saudi Aramco, which has now gone to the Japanese.
"We built up staff and project teams on the expectation of the start of a major project which was first delayed and then switched to a non- UK contractor", he said.
Similar experiences have reportedly been had by other UK companies. "The official position is there is no difficulty with the UK and I think both governments are making strenuous efforts to support that aim. I think what is happening with Davy, John Brown and ourselves is that the reality is different."
Mr Salmon made no comment on the continued presence in the UK of the Saudi dissident, Mohammed Al-Masari, which is at the heart of the diplomatic dispute.
However, he said: "You have to regret that having made a concerted effort to develop a business in an area, that effort has been frustrated."
The loss of the business has cost 40 to 50 jobs and means that plans to recruit around 200 extra staff have been abandoned.
The Saudi business represents over a third of Babcock's process engineering business, which had a turnover of pounds 86.7m in 1994/5, and has been built up rapidly over the past two to three years.
- 1 Game of Thrones season 6: Jon Snow theorists believe Ned Stark's son may have a twin sister
- 2 Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
- 3 Miley Cyrus address Robin Thicke VMA controversy: ‘He wanted me as naked as possible, but I got the heat because I’m a woman’
- 4 iPhone 6s camera: features to include 4K video camera and flash for selfies
- 5 A pint of water every day is the key to losing weight, scientists say
Miley Cyrus address Robin Thicke VMA controversy: ‘He wanted me as naked as possible, but I got the heat because I’m a woman’
Most expensive city to live in for expatriates: Luanda, Angola takes number one spot with Hong Kong and Zurich in top three
If Surrey were Syria: Social experiment shows what it's like to live under siege
Irish tourist filmed fighting with shopkeepers in Turkey says they 'messed with the wrong man'
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal get peerages
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...