BABCOCK International is said to be in a "strong position" to deal with the impact of coronavirus after reporting growth in its defence division.

The engineering giant did, however, admit that they will enter the next financial year with "uncertainty."

Babcock have revealed that staff who can are currently working from home but that the bulk of its service delivery is non-discretionary and critical to customer operations with major sites, including Rosyth Dockyard, remaining operational.

The company has said it has made “limited use” of furloughing staff in a number of areas such as airports and civil training businesses.

Senior executive management have also taken a temporary 20 per cent reduction in basic salary and the annual bonus and pay rise for the new financial year have been deferred.

Archie Bethel, Babcock chief executive, who is set to retire, said: “We end a busy year in a strong position to deal with the current coronavirus uncertainty."

He said the group had “taken action to address weaknesses in aviation, including writing down goodwill to reflect our updated expectations of the oil and gas market".

Mr Bethel continued: “The early impact of the global COVID-19 pandemic had a limited impact on the group in the last financial year but is creating uncertainty as we head into this new financial year.”

The group, which is one of the Ministry of Defence’s largest contractors, cited new wins including a £1.3bn contract to build the Type 31 warship for the Royal Navy at Rosyth announced last autumn.

Babcock International, which owns and operates marine engineering infrastructure at Rosyth Dockyard, hailed a £1 billion rail track renewal programme contract for Scotland in a set of final results that swung to loss after a massive hit to its aviation arm.

Shares in the London-listed firm dipped lower after it swung to a £178.2 million pre-tax loss in the year to March, after posting a £235.2m profit in the previous year.

They have, however, reported "good" growth in defence, with the company announcing that it has a record combined order book and pipeline of around £35bn, against £31bn, last year.

Babcock also reported an underlying operating profit of £524m, including a “small impact of COVID-19’.

The exceptional items totalling £503m include an aviation goodwill impairment of £395m, and it had other aviation charges of £143m including oil and gas writedowns.