A KEY player in the construction of the Royal Navy’s two new aircraft carriers reported growing half-year profits and sales as it squeezes more work out of cash-strapped customers.
Babcock International said work on the new 65,000-tonne Queen Elizabeth Class aircraft carriers, the last ships to be partly-built in Portsmouth before BAE Systems’ shipbuilding moves wholly to Scotland, has helped lift its revenues by nine per cent to £1.7bn in the six months to the end of September.
BAE Systems last week announced plans to axe 940 shipbuilding jobs at Portsmouth Naval Base, as reported extensively in The News.
Babcock is part of a BAE-led consortium working on the carriers, and pieces together huge parts of the vessels at its Rosyth shipyard in Scotland.
It said submarine contracts in the UK and Canada, as well as warship refit work in Australia, had also helped.
The engineer’s pre-tax profits grew 17 per cent to £141.7 million and Babcock said its £12 billion order book gives it confidence, despite a dip from £12.5 billion a year earlier.
The group, which earns just over half its sales from the Ministry of Defence, and which has a base in the Lakeside North Harbour Business Park in Portsmouth, said it is thriving as customers demand better value for money.
In a statement issued with the results the company said: ‘We are well positioned in our markets to benefit from the ongoing economic climate of austerity and financial constraint.’
Babcock said it is tracking ‘significant opportunities’ which have not yet come to market, citing a £15.5bn bid pipeline.
It has set its sights on a contract to decommission Britain’s Magnox fleet of former nuclear power sites, worth between £4bn and £5bn. Babcock has joined forces with US firm Fluor for the bid, with a decision on the preferred bidder expected in March. Analysts at Panmure Gordon said Babcock’s outlook is ‘very bright’, and the company said there was no change to its maximum risk after the MoD amended its contract terms last week.