FTSE-100 engineering services group Babcock International is reportedly looking to take an equity stake in the new generation of UK nuclear plants.
The company, whose business with the Ministry of Defence spans Heathrow baggage handling to the maintenance of the Trident submarine fleet, is holding talks with Japan’s Hitachi over a stake in the new Advanced Boiling Water Reactor plants planned for sites at Gloucestershire, Oldbury, and Wylfa at Anglesey. Up to six new reactors are planned under Hitachi’s Horizon programme.
Babcock chief executive Peter Rogers said, “We told Hitachi we could be an equity partner in the station build. The equity piece would be tens of millions of pounds rather than hundreds of millions. Five years from now I would expect to have a bigger nuclear business.”
Babcock’s growing interest in the nuclear field comes after six months of “strong growth”, particularly in the marine division, as described by Rogers. The firm is also leading the consortium bidding for the 20-year, £5b contract to decommission the UK Magnox reactors, and has already secured the contract to clean up Scotland’s Dounreay nuclear plant.
Sales and group profit have been boosted by increased work on UK and Canada submarine programmes, in addition to ongoing assembly of £6.2b Queen Elizabeth class aircraft carriers at the firm’s Rosyth yard, and the commencing of Australia’s warship refit contract
Last week’s decision by BAE Systems to close their Portsmouth shipyard will have no effect on the Rosyth carrier assembly, according to Rogers. “It looks to me a very sensible commercial decision. There has been all this puff about Portsmouth being the home of shipbuilding but Portsmouth hasn’t built a major ship in two to three decades.”