Babcock gains new Five Eyes partner with Australian communications deal

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Shares in Babcock fell over 12.5 per cent this morning after the defence giant warned that the coronavirus pandemic had had a “significant impact” on its finances.

Babcock International (Babcock) has been chosen by the Australian Government to upgrade its defence capabilities.

The aerospace and defence giant will bolster the Defence High Frequency Communication System (DHFCS) in support of Australia’s land and sea forces.

The deal covers the next decade with a further four extension options, each of two years.

Babcock Australasia will work with Lockheed Martin Australia, and the Australian Defence Force (ADF) to develop the DHFCS .

This follows Babcock’s defence communication agreements with the UK and New Zealand – with the company now providing services for three of the Five Eyes intelligence countries.

The deal is a boost for Babcock, which cut over 1,000 jobs in April after a £1.7bn writedown.

David Lockwood, chief executive, Babcock said: “This selection reinforces confidence in our ability to grow our defence business in target international markets, and to build on Babcock’s capability in digital defence, an area of increasing importance to our global customers.”

The good news follows a strong period of trading for the defence industry, with key markets continuing to invest in defence despite the challenging pandemic conditions.