Babcock orders soar after Shropshire defence buyout

Babcock formally completed the takeover of Defence Support Group, which employs around 860 people in Telford working on Ministry of Defence contracts, at the end of March, having been named the preferred bidder last November.

That £140 million deal came with a £900 million, 10-year contract to provide services to the Ministry of Defence.

It was part of a £2.02 billion acquisition spree which Babcock embarked upon during the year.

And that has helped increase the engineering and support group's advance order book to the tune of £20 billion – compared with £11.5 billion at the same point last year.

Chief executive Peter Rogers said: "Babcock performed strongly last year, both organically and through acquisitions.

"We achieved double digit organic growth in revenue and operating profit driven by major contract wins and by expanding the size and scope of existing contracts.

"Growth from Marine and Technology and Support Services has been particularly compelling."

He added: "Our recent acquisitions have continued to perform in line with our expectations and have created an excellent platform for future growth."

Babcock grew its overall revenue, meanwhile. The top line figure of £4.5 billion was around £1 billion higher than at the same time last year.

In the defence and security division which includes the newly-acquired Telford operation, revenue fell by five per cent to £812.8 million during the year, including from joint ventures.

But that was before the integration of the Defence Support Group operations.

The division also achieved a nine per cent increase in operating profit to £128.7 million.

Across the group, underlying pre-tax profit increased by 32 per cent to £417.7 million.

DSG's Donnington operation covers a range of operations including training apprentices, repairing and upgrading armoured vehicles, repair of electronics, support of light weapons, vehicle and equipment inspection, and wheeled vehicle repair.

Its facilities, which are used to work on items such as light cannons and armoured vehicles like the Stormer Warrior, include a training centre, repair bays with cranes that can work on vehicles weighing as much as 25 tonnes, and a light weapons repair workshop and test firing range.

In total, Defence Support Group employs more than 2,000 people around the country, with Telford representing a large chunk of its headcount.

The contract handed to the group at the time of its sale to Babcock has the potential to grow to £2 billion over the course of its lifetime, and will save the MoD around £500 million, according to Ludlow MP and Defence Minister Philip Dunne.