A consortium led by aerospace and defence firm Babcock International (BAB) has been chosen by the Government as the preferred bidder for the £1.25bn contract to build the UK’s new fleet of navy war ships.
The Type 31 general-purpose frigate programme would provide the UK with a fleet of five ships, at an average production cost of £250m per ship, the company said.
The news saw investors rally round the stock, pushing the share price more than 2% higher to six-month highs of 549.8p. That values FTSE 250 Babcock at £2.78bn.
PEACEKEEPING AND WAR FIGHTING CAPABILITY
Babcock’s Arrowhead 140 design will offer the Royal Navy a new class of ship with a proven ability to deliver a range of ‘peacekeeping, humanitarian and war fighting capabilities whilst offering communities and supply chains throughout the UK a wide range of economic and employment opportunities,’ Babcock said.
Work on the fleet of five ships will begin immediately following formal contract award later this financial year, with detailed design work to start now and manufacture commencing in 2021 and concluding in 2027, the company added.
‘Driven by innovation and backed by experience and heritage, Arrowhead 140 is a modern warship that will meet the maritime threats of today and tomorrow, with British ingenuity and engineering at its core,’ said Archie Bethel, chief executive of Babcock.
‘It provides a flexible, adaptable platform that delivers value for money and supports the UK's National Shipbuilding Strategy.’
UK SHIPBUILDING STRATEGY
The ships will be assembled at Babcock's Rosyth facility, but involve supply chains throughout the UK, in line with the UK's shipbuilding strategy. The UK’s National Shipbuilding Strategy has ushered in a new era for naval procurement in the UK and Babcock has years of experience and expertise to play an important role.
>Babcock joined with French defence supplier Thales plus BMT, Harland & Wolff and Ferguson Marine to form Team 31, the consortium that will run the project.
In June Babcock revealed that it had rebuffed a merger offer from UK outsourcing firm Serco (SRP). Since then shares in the UK defence firm have rallied close on 14%.
