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BAE Systems awarded £2.4bn defence contracts for work on submarine programmes

Defence secretary Gavin Williamson said the investment in nuclear submarines shows the government's "unwavering commitment to keeping the UK safe" from threats

The contracts will cover work over the next year

BAE Systems PLC (LON:BA) has been awarded two contracts worth a combined £2.4bn with the Ministry of Defence (MoD) to work on submarine programmes.

The government awarded BAE with a £1.5bn contract to deliver the seventh and last of the Astute class submarines, to be named Agincourt, the company said in a statement.

BAE landed a further £900mln contract for the construction of the next phase of the Dreadnought submarine programme to replace the four Vanguard submarines that make up the UK’s nuclear fleet.

"This multi-billion-pound investment in our nuclear submarines shows our unwavering commitment to keeping the UK safe and secure from intensifying threats,” said defence secretary Gavin Williamson.

"HMS Agincourt will complete the Royal Navy’s seven-strong fleet of hunter-killer attack subs, the most powerful to ever enter British service, whilst our nuclear deterrent is the ultimate defence against the most extreme dangers we could possibly face."

The contracts will cover work over the next year.

READ: BAE Systems maintains forecast for flat 2018 earnings, sees good prospects for adding to its order backlog

The Agincourt is scheduled for handover to the Royal Navy in the mid-2020s while the Dreadnoughts are not due to enter service until the 2030s.

Construction on the first of four new Dreadnought submarines started in October 2016.

The first three submarines in the Astute class are already in service with the Royal Navy. 

Shares in BAE were little changed at 633p in afternoon trading.

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