DSG and MacNeillie help boost business at engineering giant Babcock

Its Defence Support Group (DSG) site at Donnington is working on Army vehicle contracts, while the MacNeillie specialist vehicle builder at Walsall is supplying 100 adapted Mercedes-Benz Sprinter vans for police forces UK-wide.

Babcock has also sealed engineering deals worth £360m to work on the new British Navy aircraft carriers and Type 45 destroyers, has become the first non-American company to supply critical parts for US submarines and has an 11-year training contract with the French Air Force.

It has resulted in full-year underlying revenues for the group rising 7.7% to £5.2 billion, while pre-tax profits are up 7.6% to £494.8 million.

Archie Bethel, Babcock's chief executive, said: "Babcock continued its strong track record of growth last year. We increased revenues, profits, earnings per share and cash conversion, reduced net debt and are again delivering an increased dividend payment.

"Our success is powered by Babcock's distinctive position as an engineering group dedicated to providing critical services for major public and private sector customers.

"We are focused on being the experts in our chosen sectors, with a combination of deep technical skills, unique infrastructure and strong long-term relationships which set us apart.

"During the year, we took important steps that further strengthen our platform for future growth. Internationally, we made significant breakthroughs in winning business from the French Ministry of Defence and becoming the first non-US company to win important business on an American nuclear submarine programme.

"With our combined order book and near-term bid pipeline of almost £30 billion and our healthy tracking pipeline, we expect to continue to generate sustainable growth this year and over the medium term."

MacNeillie was bought by Babcock in 2015 for £66 million and builds ambulances, riot vans and armoured cars for diplomats and VIPs, It employs around 300 at its factory in Stockton Close. Its skills are now being brought into play across the Babcock business.

In the company's end-of-year statement today it said: "Our specialist vehicle conversion business, MacNeillie, is now being more widely leveraged across our fleet management businesses and in the DSG business in the defence and security division."

The DSG operation at MoD Donnington, at Telford, employs around 850 people and, said Babcock, had 'a busy year' in 2016.

"We are currently working on a demonstration project for the Warrior Capability Sustainment Programme and are engaged in discussions regarding the full programme of 380 armoured vehicles," said the company. "We successfully completed the overhaul and reset of 670 vehicles returning from military operations ahead of schedule."