Babcock is boosted by MoD deal

City A.M. Reporter
DEFENCE services group Babcock International yesterday said a recently agreed contract with the Ministry of Defence (MoD) would boost the value of its order book by 40 per cent and that second half trade had been strong.

“Following the agreement with the MoD, the group’s order book will be increased by about £2.5bn to around £8.5bn,” Babcock’s chief executive Peter Rogers said.

Babcock last week won a 15-year agreement – from 2010 until 2025 – guaranteeing its role as Britain’s lead industrial partner for submarine support, maintenance and decommissioning.

The contract also guarantees Babcock’s status as Britain’s preferred supplier for engineering and services for warships and submarines at Royal Navy bases at Devonport in southwest England and Clyde in Scotland from 2013 to 2025, which is worth around £2.5bn pounds to Babcock over the 12 years, it said.

Babcock, which last week agreed to takeover rival VT Group for around £1.4bn pounds, also said trade in the second half of the year had remained resilient, with no significant changes to market conditions.

Babcock’s shares closed 2.4 per cent higher yesterday at 594.5p.