Babcock seals the deal for £160m worth of contracts with the Royal Air Force

Francesca Washtell
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Two New Typhoon Tranche 2 Aircraft Delivered To RAF Coningsby
Babcock will provide aircraft maintenance under the three new contracts (Source: Getty)

Engineering outsourcing firm Babcock has landed three regional contracts to provide support services to the Royal Air Force (RAF).

Under the contracts, worth £160m for the first five years, the FTSE 100 company will work on 19 separate services including aircraft maintenance, airfield support and specialist armoury and engineering.

There is the option for a further two one-year extensions that could bump up the value of the work to around £220m.

The contracts were won through a competitive tender process under the Technical Support Services Provision, it said in a market update today.

Read more: Seneca backs Babcock and bucks the support services exodus

Around 850 staff will transfer to Babcock for the programme, which covers 17 sites in Wales and the west midlands, the south east and Scotland and the north east.

"We are investing this £160m in ensuring these RAF bases across the country continue to get the expert support they deserve, servicing equipment for the frontline and supporting our world-beating capability across the board," said defence minister Harriett Baldwin. "This pragmatic approach will ensure we are looking after our famous air force at home, as they protect our interests both here and around the globe."

Babcock's shares took off on the news, closing up 2.5 per cent at 759.5p.

Read more: Babcock sails into preferred bidder status in Royal Navy deal worth £360m

The firm's shares have been on the decline over the last couple of years, as it got stuck into an operational review and Brexit raised concerns about its order book.

In September it said it was on track to meet full-year expectations and had 89 per cent of revenue in place for the 2017/18 year and around 57 per cent for 2018/19.

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