Babcock Reverses £95.5 Million in Type 31 Revenue as Inflation Eats Fixed-Price Frigate Deal

Babcock International confirmed a £140 million charge on its five-ship Type 31 frigate contract in June 2026 results, of which £95.5 million stems from reversing previously booked revenue. Inflation and rework costs since the November 2019 fixed-price award have eroded margins. The revenue reversal—distinct from a cost overrun—signals deeper contract restatement under IFRS 15, raising questions about whether future quarters will reveal further exposure as deliveries progress.