1st Jul 2008 10:39
1 July 2008
Babcock International Group PLC
Award of Canadian Submarine Support Contract
Babcock International Group PLC (Babcock), the leading submarine support provider to the Royal Navy, announces that the Canadian Government has awarded Babcock Marine the In-Service Support contract for its four Victoria class submarines (VISSC). This contract marks Babcock's entry into the international submarine support market utilising the significant technical expertise and depth of knowledge built up over many years within its UK Marine division.
The initial contract is for five years and is expected to be worth around C$250 million (£125 million) to Babcock. The Canadian Government has options to extend the contract up to a total of 15 years, with the total contract value to Babcock expected to be in the order of C$1.5 billion (£750 million).
The VISSC contract will be managed by a joint venture company, the Canadian Submarine Management Group (CSMG), formed by Babcock Marine and Weir Canada Inc. CSMG will operate from a head office in Ottawa with a number of seconded staff from Babcock Marine in the UK providing submarine support expertise. Victoria Shipyards will be sub-contracted to undertake the refits in their shipyard near Vancouver and BMT Fleet Technology will provide some specialist technical support.
Peter Rogers, Chief Executive of Babcock commented
"We are delighted to have won this contract, which recognises the strength that we derive from our leading position in the UK submarine support market. This contract represents our first move into the international submarine support market, where we hope to build further on our existing expertise. We look forward to working with the Canadian Government to develop the long-term relationships and deliver the high standards of customer service for which we are recognised."
Ends
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Contacts: |
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Babcock International Group |
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Peter Rogers, Chief Executive |
020 7291 5000 |
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Bill Tame, Group Finance Director |
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Terri Wright, Head of Investor Relations |
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FD |
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Andrew Lorenz |
020 7269 7121 |
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Sophie Kernon |
Notes to Editors
Victoria In-Service Support Contract (VISSC)
1. The scope of the contract includes - conducting maintenance on submarines during fleet time and deep maintenance during
refits - engineering services: working up design change solutions to upgrade capability - supply chain management - equipment repair and overhaul.
2. There will be a phased build up to full operational support during the first six months of the
contract.
3. The CSMG management team will be based in Ottawa, with satellite offices supporting the
operational submarines in Victoria and Halifax, close to their base ports on the east and
west coast.
Babcock International Group PLC
1. Babcock is an engineering support services company with a market capitalisation of
around £1.4 billion
2. In the financial year ended 31 March 2008 Babcock reported revenues of £1.56 billion and
underlying profit before tax of £95.5 million
3. Babcock's key strengths are
a. a highly technical engineering skill base
b. a complex project management capability
c. an ability to work in partnership with its customers to deliver the highest standards
of customer satisfaction
d. a thorough understanding of and ability to manage customers' operationally critical
assets
4. Babcock operates through six divisions based extensively in the UK with operations in
southern Africa and North America.
5. Through its Marine division Babcock is the UK's leading naval support business and is the
largest support provider to the Royal Navy. Babcock is the sole provider of through-life
support to the Royal Navy's submarine fleet and owns the only facilities in the UK where
nuclear submarines can undergo refuelling and deep refit work. Babcock also manages,
on behalf of the Royal Navy, the Clyde naval base at which the majority of submarines are
based and where in-service maintenance is carried out.
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