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(Alliance News) - Babcock International Group PLC on Thursday said it has signed an initial contract with the UK Submarine Delivery Agency for the multi-year refit of nuclear submarine HMS Victorious.
The London-based aerospace, defence and nuclear engineering services company said the deal for the second of the UK's Vanguard Class nuclear submarines would replace a previous contract on the same terms before the end of the year. No financial details were disclosed, however.
Babcock said the contract enables it to begin "deep maintenance of the complex submarine" at its facility in Devenport, Plymouth.
HMS Victorious plays a "vital" role in the UK's continuous at-sea deterrent, Babcock said, with the refit programme set to support around 1,000 jobs in the Plymouth area.
"This is the result of a truly collaborative effort with the SDA. The work we do to support the vanguard class fleet, a vital part of the UK's defence, has never been more important," said Dominic Kieran, chief executive officer of Nuclear at Babcock.
"The commercial framework we have agreed will ensure the retention of our skilled workforce, support future recruitment and enable us to focus on supporting the SDA in its drive to increase submarine availability."
SDA CEO Chris Gardner added: "The completion of HMS Victorious' deep maintenance period is vital to supporting defence's highest priority. We look forward to working with Babcock to deliver the project on time to enable ongoing submarine availability and to continue to transform Devonport naval base into a centre of excellence for submarine deep maintenance."
Babcock added that it was in discussions with the SDA and the Royal Navy to finalise a long-term strategic partnership on deep and base maintenance of submarines.
"Expected to replace current commercial arrangements under the future maritime support programme, this would place Babcock on a similar footing to other key industrial partners, as part of a wider defence nuclear enterprise," the company said.
On Wednesday, Babcock said it expects to announce full-year results in-line with the guidance provided in its post close update back in April.
In April, Babcock said its underlying profitability in financial 2023 was in-line with expectations when excluding the potential one-off impact of the Type 31 contact.
The contract was awarded by the UK Ministry of Defence to deliver five Inspiration Class frigates for the Royal Navy at an average production cost of GBP250 million per ship. In April, the company said it had recognised over GBP600 million in revenue on the programme but no profit.
The company will release its full-year results on Thursday next week.
Shares in Babcock were down 0.7% to 283.94 pence each in London on Thursday morning.
By Greg Rosenvinge, Alliance News reporter
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