Latest news with #DavidLockwood
Times
10-05-2025
- Business
- Times
Babcock boss: I had to make our customers like us again
David Lockwood is talking about punk rock. The chief executive of defence firm Babcock is so enamoured of the genre that he made his top team write a punk song at a management away-day in 2021. Lockwood — who had been in charge for just a year — wanted to jolt Babcock out of its doldrums. He even hired a band for the occasion. 'People threw out sentences and they knitted them into a three-chord Babcock punk song,' he says. 'The theme was, 'This is not a rehearsal.' ' He stops short of playing me the song, perhaps sensing it sounds like weapons-grade corporate cringe. With his neat navy suit and owlish spectacles, Lockwood is hardly the archetypal punk rocker; he is more bookish accountant than headbanger. I have many questions — what sort of 'punk' rock band lets itself be hired out by a defence company? — but it seems churlish to mock. It is also pretty hard to argue with his results. Punk song or not, Babcock appears to have found its mojo. Shares in the company responsible for maintaining and repairing the UK's nuclear submarines have risen 70 per cent this year, and by nearly 300 per cent since Lockwood took the helm in September 2020. It rejoined the FTSE 100 in March, after a seven-year absence, and expects revenue for the last financial year to be £4.8 billion, up 11 per cent. Part of Lockwood's success has been down to explaining to investors what Babcock is — because it is not a typical defence company that makes bombs and guns. 'We were slightly misunderstood,' says Lockwood, 63. Although Babcock, which started life in 1867 as a boiler-maker, is one of the biggest listed defence companies in the UK and one of the largest suppliers to the Ministry of Defence (MoD), it has focused on services since the 2000s, becoming the outsourcer of choice for the British military. Among its many jobs it produces armoured cars, maintains helicopters and trains fighter pilots. In Ukraine, it has a contract to keep Challenger 2 tanks battle-ready. In the UK, it operates the Devonport naval base in Plymouth and the Rosyth base in Fife. It retains a foothold in shipbuilding, mainly through a contract to build five Type 31 frigates for the Royal Navy. • Babcock is ready to respond as a nervous world issues call to arms The company, with 26,000 staff, is 'a people-based business', Lockwood says. 'We're all about know-how, not intellectual property.' In some areas — looking after nuclear subs, for instance — Babcock faces little obvious competition. So why was the company in such a bad way when Lockwood joined? It had miscalculated the value of some contracts and issued a string of profit warnings. It was also targeted by an anonymous research outfit called Boatman, which questioned its finances. Then the pandemic struck. 'When I started, the biggest concern of the market was that we were going to have a rights issue,' says Lockwood. This would have meant the company going cap-in-hand to shareholders for more money. He sidestepped this and began the painful, but necessary, process of scrutinising all its contracts. 'Getting the financial foundations right was very important, so you can measure your progress.' Babcock also needed a 'culture' overhaul, he says. Specifically, it had to address a disease that afflicts many government outsourcers: 'The biggest single problem was that our customers didn't like us. They needed us, but they didn't like us.' Babcock, Lockwood explains, was too focused on its own internal targets, rather than giving customers what they wanted. Since then, there has been much wrangling over contracts. He describes a recent negotiation that sounds more like marriage counselling than a business deal. 'We actually did a kind of people session. It sounds a bit tree-huggy, but we said: 'Let's be honest with ourselves about what we feel about each other.' ' This bout of truth and reconciliation seems to have worked: the result was a £1 billion contract extension with the MoD to support the army. Under Lockwood's watch, Babcock has slimmed down significantly: the headcount has fallen by nearly 8,000, partly through job cuts and disposals of businesses. He has also simplified the company's structure. When he joined, he says, Babcock had no group HR department, 'which is kind of odd in a people business'. 'We had 29 different maternity policies,' Lockwood adds, which made it difficult for staff to move around. Recruiting and training staff remains one of the company's priorities, he says. It is a theme he returns to again and again; he tells of his delight when Babcock poached a chef in Plymouth to become a technical apprentice. Does his firm encounter resistance from young people who dislike the idea of working in defence? 'There's still hostility on some campuses, without a doubt,' Lockwood says. But Babcock's referral schemes are 'massively oversubscribed', he insists. Even investors with ESG (environmental, social and governance) qualms are coming round, he believes. 'I've always struggled with the ESG [objection],' he says. 'People must think we're bad for society. That's the only reason you could get caught in an ESG agenda. And given the things we're defending against, that's quite difficult [to argue]. 'So I think we have seen more people look at it properly and think: this is just silly. There are definitely funds which used to screen defence out but now screen it in.' • The gaps in Europe's defence capabilities and who might fill them The son of two civil servants from working-class backgrounds, Lockwood grew up in Essex. 'I never really knew what I wanted to be,' he recalls. So 'I failed the 11-plus and I went to a county high school where I was rescued, I think, by some very good teachers.' After studying maths at York University, he opted for an accountancy career and found himself working for a string of engineering companies. By 'happenstance', he gravitated towards defence. Along the way he picked up roles at BAE, BT and Thales, before landing the chief executive role at Laird, an electronics business, and Cobham, the defence manufacturer that was controversially bought by private equity in 2020. The banker Richard Perelman, at JP Morgan Cazenove, says Lockwood combines 'intelligence and a relentless drive with a disarming sense of humour'. He adds: 'You always know where he wants to take the business strategically, but he is open-minded about how to get there.' The defence sector has been thrust into the limelight, first by the war in Ukraine and then by President Trump's demands that Europe spend more on its own security. Sir Keir Starmer has already pledged to increase defence spending. 'Clearly, given that we're a defence company, more money spent on defence, as long as we're performing well, ought to be a good thing,' Lockwood says. 'The mood music from America that Europe needs to be able to stand up isn't going to go away.' He points out that 'unusually for UK defence companies, we are very low-profile in the US'. Babcock has a big business in France, which it hopes to grow. Likewise, he spies opportunity in Ukraine. 'We don't do bombs, bullets and missiles at Babcock. We do the restoration of fleets of vehicles. Ukraine has the most complicated fleet of vehicles in history, I think. So whatever the peace is and however it comes, they're going to have to work out what to do with all of that. And that's a core business for us.' As for the government's forthcoming strategic defence review, led by Lord (George) Robertson, Lockwood expects there will be a high-level list of priorities, but that the nitty-gritty of how to tackle them will still need to be ironed out. '[Defence secretary] John Healey has talked a lot about more collaboration and less competition. He's talked about making decisions earlier,' he says. • Global threats are greatest since 1945, says defence secretary Defence procurement has thrown up a string of controversies in recent years, with the MoD being rebuked for contracts that have run years late and over budget. Lockwood points to a Whitehall mindset, dating back to the 1980s, that 'lowest price … was the answer'. 'How does industry work to generate a business case that is not just about the lowest acquisition costs for a thing, but its total value to the country?' he asks. That sounds a lot like big business lobbying for fatter contracts at the taxpayer's expense — although contracts have not always gone Babcock's way: it was very much the loser in the deal to build the Type 31 general-purpose frigates. The company has taken a near-£200 million hit from the agreement and will never make a profit on it. Lockwood blames two main factors: its attempt to work on through lockdowns, resulting in delays and extra cost; and post-Covid inflation. The nature of the contract meant that Babcock had to swallow these costs. The first of five Type 31s will float from Rosyth later this year; a second should follow this winter. 'We will produce five warships inside ten years from contract award, which has never been achieved anywhere ever,' Lockwood says. 'So from an operational point of view, big success; from a commercial point of view, not so much.' Beyond defence, Lockwood hopes to grow Babcock's civil nuclear business, where it wants to support the construction of small modular reactors (SMRs) — scaled-down nuclear power plants. He says Labour's planning reforms will help make them a reality, but warns that the security costs could be high. 'How are you going to make them affordably secure? You could blow the economics by deciding you need a small army to guard each one.' Now that he has steered Babcock back into the FTSE 100, how much longer does he want to stick around? Lockwood, the unlikely punk chief executive, offers a neatly evasive answer. 'I'm a sailor,' he says, citing his love of yachting. 'The last thing you do is get off a boat immediately after you've gone about. You're just about to get into the good bit.'
Yahoo
25-04-2025
- Business
- Yahoo
Packsize to acquire packaging automation company Sparck Technologies
Packsize has reached an agreement to purchase Dutch packaging automation company Sparck Technologies. Financial details of the deal have not been disclosed by either company. This move is aligned with Packsize's strategy to expand its global footprint in the automated packaging sector. The company plans to integrate its service framework with Sparck's technology, including its lid-and-tray and box-last systems. This combination is set to expand the firm's offering to better respond to changing customer demands. Packsize CEO David Lockwood said: 'Sparck has long been recognised for its innovation, reliability, and strong commitment to sustainability—values that align perfectly with our own. 'Together, our complementary technologies create a more complete product offering for our customers. 'This acquisition brings us one step closer to realising our mission of Smart Packaging for a Healthy Planet by accelerating our ability to deliver more sustainable, right-sized packaging solutions to customers around the world.' Sparck Technologies is known for its advanced solutions in automated packaging systems. It operates from its headquarters in Drachten and its offerings include CVP Impack and CVP Everest. The company claims that these systems are designed to enhance operational efficiency by producing customised boxes at scale, reducing waste in the process. Sparck was formerly a division of Quadient, a publicly traded company based in France. Standard Investment separated the business in 2021, allowing Sparck to operate independently under its current identity. Standard Investment has played an active role in supporting Sparck through a significant business transformation. This included initiatives to strengthen operations and refine the company's focus in Drachten. Sparck CEO Kees Oosting said: 'This acquisition is a perfect match. It allows us to bring more value to our customers faster and at a greater scale than either company could achieve alone.' In February, Packsize launched X6, a new automated right-sized packaging system. "Packsize to acquire packaging automation company Sparck Technologies" was originally created and published by Packaging Gateway, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Daily Mail
23-04-2025
- Business
- Daily Mail
Babcock profits fired up by global military spending boom
Babcock expects to report a significant increase in annual profits thanks to ongoing surge in global military spending. The defence firm, which manages the Royal Navy's Devonport dockyard in Plymouth, forecasts underlying operating profits for the financial year ending March will be 17 per cent higher year-on-year at £363million. It also projects turnover rising by over £400million to £4.83billion, driven by organic sales growth at constant currency rates of 11 per cent. Babcock said all four of its divisions performed well during the fourth quarter, led by its nuclear and marine businesses, with the latter enjoying an estimated £5million one-off benefit. In January, the FTSE 100 group won a 17-year contract worth €795million to provide military air training for the French navy, and air and space force. Two months later, it won a £1.6billion contract extension from the Ministry of Defence to look after British Army equipment, including tanks and armoured vehicles. David Lockwood, chief executive of Babcock, said: 'In an uncertain world, we continue to see momentum across the business. 'This has driven strong performance in all four of our divisions in the fourth quarter, resulting in full-year underlying operating profit ahead of expectations. 'Our experience, know-how and application of technology play a critical role in ensuring that our customers are ready to respond to ever-changing global threats.' Western nations are ramping up defence expenditure in response to Russia's full-scale invasion of Ukraine and concerns that China could invade Taiwan. NATO member states in Europe are also under pressure from US President Donald Trump to assume more of the security burden. Prime Minister Sir Keir Starmer promised in February to hike the UK's share of GDP spent on defence to 2.5 per cent from April 2027 and announced his ambition to raise this to 3 per cent in the next parliament. According to the International Institute for Strategic Studies think tank, global military spending soared to a record $2.46trillion last year. Shares in British defence and aerospace companies like Babcock and BAE Systems have consequently climbed considerably over the past few years. Babcock International Group share s were 2.7 per cent up at 768.5p on Wednesday morning, meaning they have risen by approximately 52 per cent this year.
Yahoo
06-02-2025
- Business
- Yahoo
FTSE 100 Live 06 February: Index higher ahead of interest rates decision, AstraZeneca results
07:50 , Graeme Evans Babcock International highlighted further progress today by forecasting revenues and underlying operating profit ahead of City expectations. The FTSE 250-listed engineer's outperformance is due to double-digit organic growth in its Nuclear division and strong growth in Marine. In Nuclear, growth has been driven by increased new build and decommissioning work in civil nuclear as well as increased submarine support activity and higher than originally expected infrastructure revenues. Chief executive David Lockwood said: 'Our engineering skills and know-how are in ever greater demand and with significant opportunities before us, I look forward to further profitable growth." 07:31 , Graeme Evans New growth and inflation projections are due to be unveiled later alongside the Bank of England's latest interest rates decision. The base rate is set to fall from 4.75% to 4.5%, in keeping with the central bank's current once-a-quarter approach to loosening monetary policy. The City sees the Bank's monetary policy committee (MPC) voting 8-1 in favour of a rate cut, reflecting slower growth, higher unemployment and a fall back in services inflation. The main interest is likely to be on the Bank's forecasts after a weak second half of the year for the UK economy. Deutsche Bank said downgrades to GDP growth are likely alongside modest changes to the MPC's forward guidance. On the rates outlook, it added: 'Gradualism, we think, will remain front and centre for the MPC given two-sided risks to the inflation outlook. 'But more importantly, we expect the MPC to retain as much flexibility as possible in February - putting more stock on incoming data to judge relative supply and demand imbalances over the coming months.' Deutsche Bank sees the MPC cutting rates once in the first half of 2025 and three times in the second half, reducing to 3.25% by the end of the first quarter 2026. 07:14 , Graeme Evans AstraZeneca today reported a 'very strong performance' for 2024 after total revenues rose 21% to $54.1 billion (£43.3 billion) and earnings lifted 19%. Chief executive Pascal Soriot added that the current year will mark the beginning of an 'unprecedented, catalyst-rich period' for the company as it sets about targeting revenues of $80 billion by the end of the decade. In 2025, the company anticipates the first late-stage trial data for seven new medicines along with several important new indication opportunities for existing medicines. Soriot said: 'We are also investing in and making significant progress with transformative technologies that have the potential to drive our growth well beyond 2030, many of which have now entered pivotal trials." The company issued guidance for 2025 showing that total revenues are expected to increase by a high single-digit percentage and core earnings per share by a low double-digit percentage, both at constant exchange rates. 07:02 , Graeme Evans The FTSE 100 index is set to make a swift return towards record territory after IG Index futures forecast a rise of 58 points at the opening bell. The gain follows yesterday's advance of 53 points to 8623 as the top flight clawed back earlier losses caused by America's 25% trade tariffs on Mexico and Canada. The record high is 8692. This morning's trading has benefited from a stronger session on Wall Street after the Dow Jones Industrial Average rose 0.7% and the S&P 500 by 0.4%. The pound stands at $1.248 ahead of today's Bank of England interest rate decision and publication of new growth and inflation forecasts. Leading Asia markets are in positive territory, while the gold price has fallen back slightly to $2860 an ounce. Sign in to access your portfolio
