Babcock share price: Group secures £1.1bn contract with MoD

Defence outsourcer and engineering services company Babcock International (LON:BAB) has announced that its joint venture with US peer Lockheed Martin, Ascent Flight Training, has been awarded a £1.1 billion contract by the UK Ministry of Defence (MoD).

The contract is to deliver the fixed wing element of the UK Military Flying Training System (UKMFTS) through to 2033, in partnership with the MoD. Babcock further revealed that the aircrew training would take place at several military sites and comprised the delivery of three aircraft types, along with the provision of instruction, infrastructure and full life support services.
CEO Peter Rogers said: “Fixed wing training is an important part of the 25-year UKMFTS programme. Today’s announcement secures the future of fixed wing flight training for the UK’s Armed Forces.” Minister of state for defence procurement Philip Dunne added: “This is fantastic news for the future of our military aircrew, providing them with a modern training system which will equip them to deliver on the front line.”

The £1.1 billion contract has failed to impress investors, however, with Babcock’s share price falling in early trading today. As of 13:06 GMT, the blue-chip company was changing hands at 904.00p, 0.52 percent down intraday. Meanwhile, the FTSE 100 was 1.66 percent lower at 5,959.60 points. So far this year, Babcock is over 11 percent in the red, as compared to a four-percent drop in the LSE blue-chip index.
As of 13:35 GMT, Tuesday, 02 February, Babcock International Group PLC share price is 904.00p.