Devonport Dockyard has seen a massive hike in revenue but profits fell by more than £10m as it was stung by a huge tax increase. Newly released accounts for Devonport Royal Dockyard Ltd (DRDL) show the Plymouth engineering company enjoyed a hike in revenue of nearly £400m in the year to the end of March 2024.
Revenue was up to £1.522bn from £1.124bn in 2023, according to the newly published annual report and financial statements. But profit fell to £49.57m from £61.582m as the company saw its tax bill skyrocket from £15.272m to £23.250m after the rate of Corporation Tax soared from 19% to 23% in April 2023.
But revenue growth, of an impressive 35.4%, was driven by infrastructure contracts, mainly the huge construction work at 9 Dock, 10 Dock and 15 Dock to support the Vanguard and Astute Class submarines. The report, filed at Companies House, said there had also been increased submarine maintenance during the financial year.
However, operating return on revenue, a profitability ratio, was down from 6.7% to 5.1%, due to increased research and development expenditure and intellectual property royalty charges. But this was partially offset by growth in engineering services, infrastructure costs and submarine maintenance.
DRDL’s order book stands at £3.487m, up from £3.014m, which includes the total value of signed contracts and estimates of expected contracts. The increase was driven by the award of the HMS Victorious deep maintenance contract and construction at 10 Dock, part of the £2bn infrastructure rebuild at Devonport Dockyard.
The company mainly maintains and refits Royal Navy warships and submarines and operates Devonport Royal Dockyard and HM Naval Base Clyde, after it took over fellow Babcock International Group Plc subsidiary Babcock Marine (Clyde) Ltd in 2023. DRDL employs 9,077 people and has a wage bill, including pension and social security costs, of £525,464m. The highest paid director earned £618,000.
The annual report said that during the year DRDL continued to operate under the Future Maritime Support Programme (FMSP) and delivered key improvements in cost effectiveness and the availability of submarines. It provided maintenance for the Trident and Astute class nuclear subs based at Devonport and Clyde.
DRDL benefitted from Babcock being awarded the contract for the deep maintenance of Vanguard Class sub HMS Victorious, after already completing the deep maintenance of HMS Vanguard in 2023. The first Astute class sub arrived at Devonport during 2023/24 and has been undergoing maintenance.
The report said that design and construction continued on infrastructure at Devonport so it can maintain new vessels and dismantle old ones and it said DRDL is providing engineering services for Dreadnought Class subs and the Astute replacements. The company is also supporting the surface ship flotilla based at Devonport, including T23 frigates.
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