Engineering giant Babcock International Group PLC has landed a £1billion contract to design and build weapons systems for the Australian navy’s new submarines.
The defence company, which runs Devonport Royal Dockyard in Plymouth, has been chosen to provide the weapons handling gear for the new Attack class subs under Australia's Future Submarine programme
The group's contract with Naval Group, announced by the Australian Ministry of Defence, will support the operation and sustainment of the submarines, including managing the involvement of the supply chain in the manufacture, supply and assembly of critical components for the weapons handling system.
The Australian Government's AU$50 billion programme will see 12 Attack class submarines designed and built for the Australian Navy.
Babcock's role is expected to be worth around £1billion over the lifetime of the programme. Work on the design will begin immediately.
While the preliminary design phase of the weapons system will commence in Bristol, this work will initiate a transfer of skills and intellectual property to Babcock's Australian business, which will act as the Engineering Design Authority for the project.
This win adds to Babcock's well-established Australian supply-chain, which has been supporting the Collins weapons system for more than 20 years.
The win comes just days after the company revealed a huge jump in pre-tax profits to £152.5million in just six months.
Babcock saw statutory profit for the half year to the end of September 2019 jump from the £65.1million made in the same period in 2018.
The firm, which has also just landed a £1.25billion contract to build five new Type 31 frigates for the Royal Navy, said results were in line with expectations. But underlying revenue was flat at £2.458billion and statutory revenue was down 2.7%.
However, the company, which had suffered as major contracts such as the new aircraft carrier project ended, was upbeat about the future where it expects underlying revenue for the full year to be about £4.9billion and underlying profit to hit between £540million and £560million with stronger than expected trading in its land and marine divisions, the latter based in Plymouth.
Babcock chief executive Archie Bethel said he was pleased with the latest contract win and said: "I am delighted that Babcock will play a significant role in Australia's future submarine programme.
“The ability to transfer our unique Babcock IP, know-how and expertise internationally across the group allows us to play an increasing role in ensuring the defence of countries around the world."
Babcock recently revealed its order book and pipeline was up 10% since march 2019, and stands at a record £34billion.
The order book alone, following the UK frigate win, was worth £18billion. Overall Babcock has won £3.5billion in contracts including a new £300million deal to train the Metropolitan Police.
