BAE Systems secures £859m contract with British Government

20th Feb 2015 14:44

BAE Systems secured on Friday a £859m deal with the British Government for the production of Royal Navy frigates.The production will sustain 1,600 jobs in the UK and recruit apprentices and graduates, mostly in Glasgow.The Type 26 demonstration contract will start in April this year and the group expects to deliver the ships to the Royal Navy in the early 2020s.Chief executive Ian King said: "We are committed to working with the Government, the Ministry of Defence and our partners in the maritime supply chain to ensure the Royal Navy has the capability it needs to protect national interests, while ensuring the best value for money for UK taxpayers."King added the programme will change the way the group designs and manufacturers naval ships with innovative new technology.Prime Minister David Cameron said: "This is a substantial investment in our shipbuilding industry, safeguarding the jobs of 600 workers in Scotland and many more across the UK. Investing in these warships will ensure we continue to keep our country safe, at home and abroad."BAE Systems released its full-year results on Thursday, where sales and underlying profits fell. However, the defence contractor met guidance and said its larger order backlog of £40.5bn continues to provide good visibility for the future.Shares in BAE Systems were up 0.65% to 528p on Friday at 14:44.