Babcock International Group PLC (LON:BAB) on Friday said it’s been awarded a 10-year contract to provide aerial-firefighting services in Canada, a pact worth around £100mln.
The FTSE 250 engineering company won the Wildfire Suppression Services contract from the Manitoba government, the first firefighting work Babcock has landed outside of Europe. Starting in April 2019, the company will manage, maintain and operate Manitoba's fleet of seven firefighting fixed-wing Canadair water-bomber amphibious aircraft that will be supported by three Babcock Twin Commander aircraft.
The operations will cover the entire province, an area twice the size of the UK, the company said.
Archie Bethel, Babcock’s CEO, said: “We have over 30 years' experience of aerial firefighting, and this new contract positions us well for any future opportunities in the North American market.”
The North American market for aerial firefighting is estimated to be around £1.4 billion, including around £1.1 billion in the US which is accessible to companies operating in Canada, said Babcock. The new contract provides Babcock with a platform to pursue aerial emergency medical service opportunities in Canada, which represents a further market worth more than £300 million.
“The contract is small; £100m spread over 10 years at 10-15% margin. However, it is strategically very important,” said Joe Brent, head of research at Liberum. “There are 13 territories/provinces in Canada and there is clearly scope to do work for others.”
Babcock has maintained a fleet of 19 Canadair firefighting aircraft for the Italian Government.
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