Babcock assures over health after 'malicious' report

The engineering group – the Ministry of Defence's second largest contractor – insisted it "continues to enjoy a healthy financial position" following steep falls in its share price after a research paper posted last month by a firm called Boatman Capital.

Babcock said it "strongly refutes" claims made in the report by the "anonymous and so far untraceable" Boatman.

"The group continues to seek to discover who is behind Boatman Capital," it added.

Babcock includes the Defence Support Group operation at MoD Donnington, in Telford, and the former Macneillie specialist vehicle conversions business at Aldridge, now renamed Babcock Vehicle Engineering.

The Boatman report alleged Babcock has a "terrible" relationship with the MoD, while it also claimed Babcock has "systematically misled investors by burying bad news about its performance".

It also launched a scathing and personal attack on Babcock's bosses – chairman and defence industry veteran Mike Turner, and chief executive Archie Bethel – claiming they are "not up to the job".

Shares were sent tumbling after the Boatman report, with the stock remaining under pressure.

In a vote of confidence in Babcock, a government spokesman said: "We monitor the health of all of our strategic suppliers, including Babcock, and remain committed to working with them on a wide range of programmes.

"Babcock plays a key part in equipping our world-leading armed forces and the MoD spent more than £1.7 billion with the company last year, supporting thousands of jobs across the nation."

Babcock said it was delivering 128 contracts for the Government, with "future opportunities continuing to form a key part of our bidding pipeline".

But Babcock said earlier this month it would close Appledore shipyard in Devon and offer relocation to 199 employees.

The Boatman research report had cited threats to the future of Appledore.

Babcock will publish half year results on November 21.