Posted By Global Banking and Finance Review
Posted on March 26, 2025
(Reuters) -Defence group Babcock on Wednesday said it had secured a five-year contract worth around 1 billion pounds ($1.29 billion) from the UK Ministry of Defence to maintain tanks, armoured vehicles and other equipment for the British Army.
The contract extension, valued at 1.6 billion pounds in total, including 600 million pounds for sub-contractors, will cover equipment such as Challenger 2 tanks, 105mm artillery guns and Trojan armoured vehicles, the government said.
It follows Prime Minister Keir Starmer's commitment last month to increase defence spending to 2.5% of GDP, the biggest increase in the budget since the end of the Cold War.
Finance Minister Rachel Reeves will announce an extra 2.2 billion pounds for defence, including advanced technologies for modern warfare, in her budget update on Wednesday.
Shares in Babcock, which have risen 45% since the start of 2025, opened up 1.5%.
($1 = 0.7740 pounds)
(Reporting by Yamini Kalia in Bengaluru and Paul Sandle in London; Editing by Mrigank Dhaniwala and Sarah Young)