Shipshape: Babcock JV wins £870m support contract for Aussie navy’s two biggest vessels

Defence contractor Babcock may be under fire on UK shores, but a contract win to sustain and support the biggest ships in the Australian navy will help keep its head above water down under.

This morning, the defence contractor’s shares were steady as it announced it had won a 15-year, 1.5bn Australian dollar (£870m) contract for work on two helicopter-carrier ships, as part of a 50/50 joint venture with engineering company UGL Group.

Naval Ship Management (NSM), the joint venture, will see the company start supporting the two flagship Canberra Class Landing Helicopter Docks and their 12 associated amphibious landing crafts in July.

NSM already supports the Australian Navy’s fleet of ANZAC class frigates, while Babcock also works on ground support equipment for the Australian army.

Babcock chief executive Archie Bethel said the role was “strategically important”.

“Through NSM we will apply Babcock's digitally enabled asset management capabilities to support this strategically important capability over the next decade and beyond,” he added.

The win was still not enough to significantly boost the embattled defence contractor’s shares this morning, which have taken a battering since a year’s high of 864p in June.

Last month, a shadowy anonymous group calling itself Boatman Capital Research released a note criticising Babcock’s operations, including its relationship with the UK Ministry of Defence, its biggest customer.

It claimed the FTSE 250 engineering firm faced a number of problems, saying it was “burying bad news about its performance” and saying its leadership was not “not up to the job”.

After several weeks, Babcock eventually refuted the claims, calling them “false and malicious statements”.