VT signals exit from shipbuilding

Currently, VT and BAE jointly operate through BVT Surface Fleet (BVT), a joint venture they established last year to bring together the surface warship building and through-life support operations of the two groups to form what it described at the time as “a world-class industrial partner for the UK Ministry of Defence (MoD) and a leader in the global export market for warships and innovative naval surface ship support”. With operations in Glasgow, Portsmouth and Filton near Bristol, it employs over 7,000 people involved in building six £1 billion Type 45 destroyers for the Royal Navy and about to begin work on two giant aircraft carriers under the future carrier project. VT built the bow and mast sections for the Type 45s (pictured: HMS Daring, the first of the new Royal Navy's Type 45 destroyers) at Portsmouth with the rest of the work done by BAE in Scotland. In a management statement yesterday, VT said it was exercising its right from 1 July 2009 to put its 45% shareholding in BVT to its joint venture partner, BAE Systems for a minimum exit price of £380 million. VT Group has been moving the balance of its business from shipbuilding to engineering related services for some years to the point where some 80% of revenues are generated from projects as diverse as schools building and motor fleet maintenance. Current such projects include working with construction group Costain, to open its first new school in the London Borough of Lewisham under the Building Schools for the Future programme, £30 million contract to provide all technical and non-technical training to UK-based BMW employees, the supply of £30 million of support services to RAF Brampton Wyton Henlow, and two contracts to support the Nuclear Installations Inspectorate in the licensing of new reactors. VT group chief executive Paul Lester commented: “Our services businesses continue to show good growth and to perform in line with our expectations for the full year. Our exit from BVT Surface Fleet later this year will enable us to refocus exclusively on expanding our core engineering based support services offerings.” VT’s shipbuilding business was established on the River Thames in the 1860s by Sir John Thornycroft and began trading in Portsmouth in 1871.