Babcock Regulatory News (BAB)

12 October 2015

Babcock International Group PLC (Babcock or the Group)

Defence & Security division: contract update

Babcock, the UK's leading engineering support services company, is pleased to announce it has been awarded a five-year contract by the UK Ministry of Defence (MoD) to deliver engineering services to the Royal Navy at air stations in the south west of England.

The aviation and engineering support and aircraft services (AESAS) contract includes the provision of forward maintenance and aircraft engineering for Merlin, Sea King, Lynx and Wildcat helicopters, general airfield engineering services and support to aircraft operations.

Babcock's bid was strengthened by the Group's experience of supporting rotary wing platforms in both its Defence & Security division and MCS business. The AESAS contract is to provide full service delivery by 1 January 2016 and will involve the TUPE transfer of a significant number of skilled staff to Babcock.

Additionally, the Group has seen further growth within its existing DSG contract to provide maintenance, repair, overhaul and storage of a range of current military vehicles and light weapons for the MoD.

As a result of successfully meeting an early milestone in the service provision and output based contract which began on 1 April 2015, Babcock will increase its responsibility for managing the procurement of equipment spares and repairables on behalf of the MoD, to include transacting with suppliers directly.

In combination, the two contracts will generate an additional £100 million of revenue per year.

Peter Rogers, Babcock Chief Executive, said:

"We are delighted to continue to grow our partnership with the Ministry of Defence, both in the air and on the ground. Babcock is committed to delivering the improved performance levels, enhanced operational capability and increased cost effectiveness which are so critical for our customer."

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