BRITISH defence services firm Babcock International yesterday said it had traded strongly in its third quarter, with sales fuelled by governments outsourcing more work in a bid to save money.
The company said it expected to win significant contracts in 2012 as military and engineering clients continue outsourcing work.
FTSE 250-listed Babcock, which maintains Royal Navy submarines, said its order book had remained stable at around £12bn since its first-half results in November, with £10bn of contracts in the pipeline.
The company added it had won several contract extensions since its last results, and secured preferred bidder status on a number of new long-term contracts worth a combined total revenue of some £2bn.
Chief executive Peter Rogers said: “Within our markets, customers continue to experience financial and budgetary constraints and this economic environment is creating opportunities.
“We believe ... the current economic climate will continue to create significant medium and long-term growth opportunities, both in the UK and overseas.”
Other contracts in the UK nuclear, training, defence and infrastructure markets are expected to be awarded during 2012, it said.
The US, the world’s largest defence spender, has capped its military budget at last year’s levels for 2012, significantly less than its defence department requested.
It has also introduced a budget control act to curb public sector spending over the next decade, leaving many of its largest defence projects shelved.
Babcock said its US defence business was being hit by some contract delays.
