25th Nov 2019 13:10
(Alliance News) - Defence contractor Babcock International Group PLC has won GBP1 billion worth of work from the Australian Ministry of Defence.
Babcock shares were 1.7% higher in afternoon trade in London on Monday at 597.00 pence each. The shares are up 4.0% over the past 12 months, but did in May slip to 416.70p.
Babcock will be designing and building the weapons handling systems on Australia's new Attack class submarines, as part of an AUD50 billion spending programme which will see the country build 12 new submarines.
Babcock, a FTSE 250 member, said work will start straight away. Preliminary design will occur in Bristol, but will then be handed over to Babcock's Australian business.
Chief Executive Archie Bethel commented: "I am delighted that Babcock will play a significant role in Australia's future submarine programme.
"The ability to transfer our unique Babcock IP, know-how and expertise internationally across the group allows us to play an increasing role in ensuring the defence of countries around the world."
This adds to a number of contract wins recently for the company, which was awarded a GBP860 million deal just under a year ago to manage some of the Royal Australian Navy's largest vessels.
In September, Babcock was chosen by the UK Ministry of Defence to build its newest fleet of warships. The MoD picked Babcock's Arrowhead 140 frigate, of which five will be made at the Rosyth facility in Scotland.
Last week, Babcock reported a sharp rise in pretax profit in the first half of its financial year ending March, despite a 2.7% decline in revenue.
Babcock's revenue fell due to a winding down of work on the Queen Elizabeth class aircraft carrier contract, but profitability benefited from the non-repeat of an exceptional charge the year before.
"Today's results show we are doing what we said we would do. Our delivery in the first half is in line with our expectations, with good performance across most of the group. In particular, strong performance from our Marine business has offset some weakness in the Aviation sector," said CEO Bethel last week.
By George Collard; [email protected]
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