Defence engineering support firm Babcock yesterday announced it had been awarded a new ministry of defence (MoD) contract and the extension of another one in a deal worth about £100m in revenue.
The new five-year contract is for engineering services to the Royal Navy at air stations in the south west of England. The contract is to provide full service delivery by 1 January 2016.
Babcock said: “The aviation and engineering support and aircraft services contract includes the provision of forward maintenance and aircraft engineering for Merlin, Sea King, Lynx and Wildcat helicopters, general airfield engineering services and support to aircraft operations.”
The company also says another contract with the MoD relating to equipment spares and repairs has been expanded. “Together the two contracts will generate an extra £100m of revenue per year,” it said.
Babcock said it has seen further growth within its existing defence support group contract to provide maintenance, repair, overhaul and storage of a range of current military vehicles and light weapons for the MoD.
Babcock, which runs Plymouth’s Devonport Dockyard said it will also increase its responsibility for managing the procurement of equipment spares and repairables on behalf of the MoD, to include dealing directly with suppliers. The company said it would meet an early milestone in the service provision and output-based contract which began on 1 April.
Last year, Babcock completed a £1.6bn deal to buy helicopter group Avincis in its largest ever acquisition. The company launched a £1bn rights issue to help fund the purchase and some analysts questioned the price being paid.
Chief executive Peter Rogers said in a statement: “We are delighted to continue to grow our partnership with the ministry of defence, both in the air and on the ground. Babcock is committed to delivering the improved performance levels, enhanced operational capability and increased cost effectiveness which are so critical for our customer.”