BAE clinches £1bn Royal Navy contracts 

BAE Systems has clinched contracts worth more than £1billion to maintain battleships and docks at Portsmouth Naval Base.

Britain’s biggest defence company will repair and upgrade state-of-the-art Queen Elizabeth Class Aircraft carriers, Type 45 Destroyers and Type 23 under a £900million deal with the Ministry of Defence.

And, in another agreement, it will work with American group KBR to look after buildings and the docks at the base.

BAE has worked at the Portsmouth site for more than two decades and employs 2,400 people there.

The contracts could create jobs in the area. The company has 3,700 workers in the wider Solent area and around 85,000 employees worldwide.

Portsmouth, on the south coast of Hampshire, has been a naval hub for more than 900 years. The five-year contracts will be worth up to £1.3billion and will start in October. 

As well as repairing ships stationed at the base, BAE also intends to use technology developed by a company it bought last year, called Techmodal, that can help it predict where there could be problems or breakdowns.

David Mitchard, managing director of BAE Systems’ maritime services business, said: ‘We can use data science and analytics to drive improvements now. 

This will give us a much richer view of the conditions the assets are in and means we can predict failures rather than react to failures.’

Manufacturers like BAE have fared better during Covid than companies in many other industries. 

Around 90 per cent of BAE’s business is government defence orders, with the rest consisting of work for companies such as airlines and aerospace equipment makers.

It is these contracts – which include building parts like joysticks and flying systems and count GE and Boeing as customers – that have been hammered by the pandemic.

In February, it said full-year sales rose 4 per cent to £21billion and pledged to pay a 2020 total dividend of 23.7p per share – as well as handing back the delayed 2019 divi.

Last year it announced a series of contracts wins and secured more work on existing programmes – including a German order for 38 Eurofighter Typhoon jets. 

The British group looks set to rake in £900million from the £4.8billion order for the planes, which are among the world’s premier fighter jets and can reach speeds of up to twice the speed of sound.

But the company is also angling its work increasingly to cyber security and electronic warfare. 

It completed the takeover of two US cyber businesses last year – the Collins Aerospace Military Global Positioning business and Raytheon’s Airborne Tactical Radios – for £1.8billion.

As well as navigating the pandemic, BAE has been making the case for the Government to give the green light to a UK-built fighter jet, called Tempest.

BAE is among the companies designing the futuristic planes, which would be able to fly unmanned and have radar that can capture ‘a city’s worth of data’ in a second.

The group believes the project could support 20,000 jobs between 2026 and 2050, and add £25billion to the UK economy by 2050.