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Babcock hails £60m boost to order book

Babcock hails £60m boost to order book

Engineering and defence giant Babcock International hailed a £60million boost to its order books from its growing oil and gas division.

The firm, which manages the Rosyth Dockyard for the Ministry of Defence, said oil and gas work included a £17million contract with French giant Total.

The FTSE100 company said the work involved the provision of “walk to work” vessels used for the completion of two North Sea platforms.

Total confirmed the contract involved work supporting the construction of phase two of the West Franklin platform and the Elgin B platform, both recent additions to the existing Elgin complex.

Total faces a potential £1.4billion bill to repair its Elgin infrastructure after a shutdown caused by a gas leak in 2012.

Last year, Babcock acquired an Edinburgh-based LGE process business, which designs and builds plants for the processing, storage and handling of liquefied gases, from Weir Group in a £23million deal.

In a trading update yesterday, Babcock said total new order intake for commercial activities for overseas customers for the division hit £130million in its first full year.

But the firm did not provide an update on its talks to acquire all or part of the parent company of Bond Helicopters.

In November Babcock confirmed it was in “exclusive” talks over a potential joint venture with Bond Aviation owner, Avincis.

It is thought Babcock was looking to pay about £400million for a 50% stake in the company ahead of a possible full takeover at a later date.

Avincis is headquartered in London, but is owned by US private equity giant Kohlberg Kravis Roberts and Italian buyout firm Investindustrial, which owns Aston Martin.

At Rosyth, where the firm maintains seven defunct nuclear submarines for the MoD, Babcock is also working on a £30million contract on developments West of Sheltand for BP.

In an update on its third quarter performance, Babcock said its order book stands at £11.5billion. The group earns just over half its sales from the MoD.