Operational Overview

Defence

BMT provides design, engineering, and business services to national defence forces and major contractors.


Uncertainty was again a major characteristic of global defence markets during the year. The most extreme example was government closure and sequestration in the US as disagreements on public spending reached crisis point. Elsewhere, the new government in Australia announced a delay to the next Australian Defence White Paper until May 2015, impacting spending decisions. In the UK, structural changes to the MoD and general reduction in defence budgets also brought challenges across all our traditional defence markets.


Trusted Partners

But challenges also bring opportunities: implementing change requires trusted, independent partners who can deliver smart, cost-effective solutions. We were therefore able to strengthen relationships with our major defence customers during the year. By securing the Norwegian Defence Logistics Organisation (NDLO) contract, we helped further establish BMT’s global 'Platforms' business and strengthened our relationship with Daewoo Shipbuilding & Marine Engineering (DSME). We built relationships with Front Line Commands (FLC) in the UK defence market following the introduction of the ‘Levene’ reforms.


There were also improved customer relationships with both the Canadian Department of National Defence and its key suppliers. In Australia, our submarine design reputation supported our position in the Collins Class replacement programme and we continued to apply the expertise we have developed through our involvement in the defence procurement process to win non-defence government contracts in related areas.


The delivery of the BMT element of the Military Afloat Reach and Sustainability (MARS) tanker project to DSME was a key highlight during the year, as was securing the Norwegian Logistics and Support Vessel (LSV) design contract with DSME. We delivered valuable efficiency gains for the US Coast Guard through the Cutter boat support contract. Securing the Bahrain Coast Guard Patrol Boat contract through Ares shipyard in Turkey was a notable achievement. We successfully delivered Customer Friend work for the Australian Antarctic Division support vessel.


BMT's presence at Defence Security and Equipment International (DSEI), repeated at Pacific 2013 in Sydney, was more comprehensive than ever this year promoting interest from a range of potential clients.


We continue to focus on the vital task of recruiting, training and developing the people we need to drive our growth. Some excellent achievements by our staff and companies were celebrated during the year. A group of our young engineers claimed top spot with their design at this year’s Industry Powerboat Challenge. We were also delighted to receive a Queen’s Award for Enterprise in the International Trade category. This prestigious award recognises BMT’s continuing success in overseas markets.


Outlook

There are several challenges and opportunities ahead for BMT in the defence sector. These include continuing to develop relationships and deliver support opportunities to UK MOD FLCs as well as understanding and operating within the new Defence, Equipment and Support plus (DE&S+) organisation. Elsewhere in Canada and Australia we will continue to identify opportunities, innovate solutions and build relationships. Even in the US’s difficult defence markets we are positioning ourselves to take advantage when opportunities emerge.

10  |  BMT Group Annual Review 2014