HMS Prince of Wales in construction at Babcock's Rosyth dockyard 080917 CREDIT MOD

£1bn Australia Deal For Defence Company Babcock

The contractor will supply the Australian Ministry of Defence with new submarine systems.

HMS Prince of Wales in construction at Babcock's Rosyth dockyard 080917 CREDIT MOD

HMS Prince of Wales under construction at Babcock's Rosyth dockyard in September 2017 (Picture: MOD).

Defence company Babcock has seen a lift in its shares after securing a new £1 billion naval contract.

The contractor won the deal to supply the Australian Ministry of Defence with weapons-handling systems for its new attack class submarines.

It is part of a $50bn (£26bn) spending programme, which will see the country build 12 new vessels.

The company said work to design and build the systems will start straight away, with the preliminary design stage taking place in Bristol, before it is handed over to Babcock's Australian business.

Its chief executive, Archie Bethel, said: "I am delighted that Babcock will play a significant role in Australia's future submarine programme.

"The ability to transfer our unique Babcock intellectual property, know-how and expertise internationally across the group allows us to play an increasing role in ensuring the defence of countries around the world."

The deal comes almost a year after Babcock was awarded an £860m contract to manage some of the Royal Australian Navy's largest vessels.

Type 31 frigate design
Babcock has also been awarded a £1.25 billion deal to supply the UK Ministry of Defence with its fleet of Type 31 frigates (Picture: Babcock).

Earlier this month, the company was chosen to build the Royal Navy's new Type 31 frigates.

The deal to build the five warships at its Rosyth facility in Scotland was worth around £1.25bn. 

Last week, Babcock said its turnaround strategy is being driven by a raft of new projects, following a drop in half-year profits.

The group, which is the UK Government's second-largest defence contractor, reported an 18% fall in underlying pre-tax profits for the six months to 30 September.

Shares in Babcock have increased by 1.7% to 597p.