Babcock, an engineering outsourcing firm, has seals the deal for three regional contracts to supply support services to the Royal Air Force (RAF).
Under the contracts that are worth £160m for the first five years, the FTSE 100 company will work on nineteen separate services which include airfield support and specialist armoury, aircraft maintenance, and engineering.
There is the option for an additional two one-year extensions that could increase the value of the work to about £220m.
In a market update, the company said that the contracts were acquired through an aggressive tender process under the Technical Support Services Provision.
About 850 staff will be assigned to Babcock for the programme, which covers seventeen sites in the west midlands and Wales, Scotland, and the south-east, and the northeast.
“We are investing this £160m in ensuring these RAF bases across the country continue to get the expert support they deserve, servicing equipment for the frontline and supporting our world-beating capability across the board,” stated Harriett Baldwin, the defence minister. “This pragmatic approach will ensure we are looking after our famous air force at home, as they protect our interests both here and around the globe.”
The shares of Babcock took off on the news, closing up 2.5 percent at 759.5p.
The shares of the firm have been dropping over the last couple of years, as the company got stuck into an operational review and Brexit raised concerns regarding its order book.
In September, Babcock said that it was on track to satisfy full-year expectations and had 89 percent of revenue in place for the 2017/18 year and about 57 percent for 2018/19.