Babcock signals drive for change with chief executive appointment
David Lockwood prepares to refocus business when he takes job in September
Babcock International on Wednesday signalled a fresh start under chairwoman Ruth Cairnie with the appointment of former Cobham head David Lockwood as chief executive to drive change at the UK defence contractor.
Mr Lockwood, who ran Cobham for three years before it was acquired by private equity group Advent in January, will replace Archie Bethel, a 16-year Babcock veteran, in September.
“He brings wide-ranging knowledge of the defence and aviation markets, as well as a wealth of experience in both technology and innovation,” said Ms Cairnie. “His skills and industry expertise will help ensure the delivery of our operational performance and strategic objectives.”
Babcock is one of the UK’s biggest defence contractors, providing maintenance and support for the UK’s nuclear submarines at Faslane, and was a member of the consortium that built new aircraft carriers. It owns Rosyth dockyard, one of the UK’s biggest naval yards.
However, the company has had a turbulent few years, with its shares plunging from more than £10 at the time of Mr Bethel’s arrival to 320p on Wednesday. In addition, its relationship with its main customer the Ministry of Defence has at times been difficult.
Mr Lockwood’s task would be to address these issues, said people close to the company.
The new Babcock chief is expected to launch a “fundamental strategic review” of the group’s businesses and performance. Appointed to Cobham in 2017 after a string of profit warnings, Mr Lockwood began refocusing the business, which eventually found a firmer financial footing and resolved a long-running dispute with Boeing, one of its main customers.
Mr Lockwood, who left Cobham after the Advent takeover, said he looked forward to “position Babcock for further success and future growth, and to make full use of technology and innovation to support customers in the UK and internationally”.
Under Mr Bethel, Babcock sold businesses to focus on its core markets of defence, aerial emergency services and civil nuclear.
Although last year the company suffered a sharp fall in profits as a slowdown in government spending weighed on its business, Babcock achieved its long-held ambition to break BAE Systems’ monopoly on UK naval shipbuilding when its consortium won the £1.25bn contract to build the Type 31 frigate.
At an investor summit last summer, Mr Bethel set new targets for medium-term growth and set out a strategy for accelerating international growth. He won praise for holding his previous guidance on growth.
The group moved out of the support services index and into the aerospace and defence category, helping to boost its shares although they remain substantially below the peaks of 2016.
“It has been an honour and a privilege to serve at Babcock, which makes a unique contribution to national security and to saving lives,” Mr Bethel said.