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LONDON - Babcock International Group PLC (LSE:LON:BAB), the UK-based defence company, has been awarded a five-year contract extension valued at approximately £1.0 billion with the UK Ministry of Defence (MOD). This deal reinforces Babcock’s role as a strategic support partner to the British Army, building on a long-standing relationship.
The contract extension pertains to the Defence Support Group (DSG) Service Provision and Transformation Contract (SPTC), which Babcock has been managing. The agreement aims to deliver enhanced readiness, regeneration, and asset management services, leveraging the company’s engineering and supply chain expertise. These efforts are expected to increase the availability of critical army equipment while providing better value for money.
Babcock’s CEO, David Lockwood, emphasized the importance of this partnership in a time of global instability, ensuring that the British Army has the necessary resources to remain operationally ready. The Defence Secretary, John Healey MP, highlighted the significance of this investment in equipping the armed forces to respond to changing global threats, noting the role of defence spending in economic growth and job support across Britain.
The transformation program included in the contract aims to significantly improve support outputs, setting the groundwork for the army’s future modernization. Babcock has committed to investing in its workforce, which includes 1,600 skilled employees across over 20 UK sites, and continuing its robust apprentice scheme to foster talent.
The contract, totaling £1.6 billion, involves approximately £1.0 billion in revenue to be added to Babcock’s contract backlog, with the remaining £600 million delivered as an agent, not recognized through revenue.
This contract extension aligns with the Defence Industrial Strategy and is expected to contribute to growth in the UK economy. It is based on a press release statement from Babcock International Group PLC.
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