Babcock faces MoD contracts delay

THE WAR in Afghanistan looks like delaying a Ministry of Defence decision on support-service contracts with Babcock and its partners for the Royal School of Military Engineering, Armoured Vehicle Training Service and Airfield Support Services Project.

These contracts are essential for new Babcock chairman Gordon Campbell's strategy of transforming the engineer into a provider of support services for the armed forces. The first, with the RSME, could arrive in the New Year. Babcock already provides initial pilot training for the RAF, and refits ships and submarines.

Pre-tax profits fell to £115,000 from £10m in the six months ending September. But Campbell believes Babcock is 'well placed to weather any economic downturn' thanks to two-thirds of its business being in defence-related activities. The interim dividend is maintained at 1.1p.

Meanwhile, the Queen Mother was visiting the aircraft carrier HMS Ark Royal. Babcock has fitted Britain's biggest naval vessel with new engines and guns. The Queen Mother is re-dedicating the aircraft carrier.