VT exits manufacturing on a high

Reporting its annual results for the year ending 31 March, VT said it has been an excellent year for its services businesses, with all divisions producing good results as it focused increasingly on that sector. The company’s order book for services had increased by 12% to £4.5 billion at the year end (2008: £4bn). “We are in a strong position to take the Group forward to become a pure services business as we prepare to exit the shipbuilding joint venture, BVT Surface Fleet,” said chief executive Paul Lester (pictured). Turnover from continuing operations increased by 30% in 2009 to £1,096 million (2008: £845m). Pre-tax profit before taxation improved by 33 per cent to £60.5 million (2008: £45.5m). Lester said VT’s plans to exit the shipbuilding and naval support joint venture, BVT Surface Fleet, would make the year an historic one for the group, bringing to an end nearly 150 years of shipbuilding. “The exit from the joint venture will provide us with opportunities, both acquisitive and organic, to grow our higher value, engineering-based services businesses. The decision to exercise the put option in BVT will give the Group a strong balance sheet in the current economic climate”. The services businesses had all contributed to the progress of the group with VT Communications seeing an increase in profit margins for the year and VT Education and Skills showing turnover and profit growth driven by the acquisition of the training business VT Flagship. VT Support Services benefited from the start of our two major defence contracts, the Future Strategic Tanker Aircraft (FSTA) and the Military Flying Training System (UKMFTS) which both contributed to organic turnover and profit growth. VT Services in the US also saw increases in profits. In preparation for the exit from shipbuilding, VT Group will be re-organised into three operating segments, Defence, Government and Critical Services and VT Group Inc. For the full story of VT’s transition from manufacturing to services, look out for our exclusive interview with chief executive Paul Lester in the May issue of Works Management, out soon.