Babcock International Group PLC on Wednesday reported the signing of a 5-year contract extension with the UK Ministry of Defence, helping to ensure operational readiness within the British Army.

The London-based company is a provider of technical and engineering support services to customers in the defence and civil sectors.

The extension of the existing DSG Service Provision & Transformation contract, worth around £1.0 billion, will see Babcock deliver improved readiness, regeneration and asset management services, which it noted are underpinned buy ‘extensive engineering and supply chain expertise’.

Babcock said it will provide a comprehensive range of support capabilities for the Army in the UK with global reach.

It said the total contract is worth £1.6 billion, including around £1.0 billion of revenue to be taken into Babcock’s contract backlog and about £600 million delivered as agent.

Babcock said the awarding of the strategic support partner contract ‘underpins both its commitment and long-term relationship with the British Army’, adding that it will be providing value to the MOD as well as growth to the UK economy.

UK Defence Secretary John Healey commented: ‘National security is the bedrock of a successful economy and our government’s Plan for Change’.

Shares in Babcock were up 0.5% at 736.00 pence on Wednesday morning in London.

Chief Executive David Lockwood said: ‘In a period of increased global instability, more is being expected of our armed forces. This contract extension ensures that Babcock continues to provide the British Army with the tools to do its job, when and wherever they are needed.

‘Our know-how, application of technology and extensive experience in the land domain help ensure that the British Army is ready to fight and win wars. ’

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