Our operating performance | Defence and security advice and services Market context With over half the world’s population voting in general elections during 2024, the reporting year saw challenging market conditions, with a slowdown in government spending globally. This, combined with the ongoing tensions in the Middle East and Eastern Europe, forced many governments to focus on short-term priorities, emphasising the maintenance of current stockpiles and assets rather than investing in innovative new defence projects. However, governments continued to articulate their future aspirations and strategic goals, highlighting the ongoing need for consultancy support to help realise these visions. In the UK, July’s general election delayed decision-making and impacted demand. However, as the Government’s Strategic Defence Review and Industrial Strategy will conclude in 2025, demand is likely to grow, accelerated by the greater priority of the defence sector during a period of almost unparalleled geopolitical tensions. Persistent shortages of technical and programme management skills within customer organisations meant that they continued to rely on us to provide the necessary expertise and guidance in navigating these turbulent times. We provide independent design, engineering management and programme consultancy services in the ‘five eyes’ defence and security markets of Australia, Canada, New Zealand, the US and the UK. Our technical expertise, collaborative approach and impartiality help customers to meet their most complex engineering and programme challenges. The Australian defence and security market was shaped by increasing geopolitical tensions and a heightened focus on national resilience and technological advancements in defence systems. This presented a mix of transformative opportunities and complex challenges, underscoring the need for agility, innovation, and strong strategic positioning in the defence and security sector. While international pressure for Canada to meet the NATO benchmark of spending 2% of its GDP on defence did not impact the 2023-2024 budget, this commitment will be a significant stimulus going forward and is likely to further intensify skills and capacity shortages. On both sides of the North American border, we await the outcome of defence industrial strategy reviews which should provide long-term predictability and enable better planning for us. Performance Our biggest defence market, the UK, showed strong growth, buoyed by delivery of the first stage of the largest ever contract win in our history, as a key supplier and subcontractor to the Royal Navy’s Fleet Solid Support (FSS) programme. With the UK government’s Strategic Defence Review and Defence Industrial Strategy due to be completed this year, we are confident that we will be well-positioned and able to maintain our market share going forward. In the context of challenging market conditions and limited opportunities, our performance in Australia was solid. Our team demonstrated resilience and agility, to secure market share. These efforts put us in an advantageous position to capitalise on future opportunities as the market evolves. Business performance across the North America defence portfolio was good during the reporting year, despite the prevailing market conditions. We not only achieved another record revenue year for the Engineering Logistics and Management Support (ELMS) contract but also won a long-term, high-profile contract to conduct the Naval Technical Officer Training for the Royal Canadian Navy (RCN). This will help to diversify our contract base, provide additional development opportunities for staff and improve contract margins. Strategy and organisation As technology continues to evolve at a rapid pace, we carried on investing in upskilling our employees. Our people remain central to everything we offer and the challenge of recruiting and retaining talent is ever-present in today’s competitive global market. This commitment to investing in people ensures that we continue to sustain and develop the close relationships and trust we have built with our customers. Our investment in the Autonomy campaign broadened skills beyond the core team. In a similar vein, our Consulting for Complex Transformation campaign elevated our service offerings into higher-value domains by fostering new skill sets. Our new global organisational design provides opportunities for deepening specific skill sets, while also offering the chance to gain experience across different markets. This not only enhances our capabilities but also makes us more adaptable and versatile in meeting the diverse needs of customers. To meet procurement criteria and ensure we deliver for all stakeholders, Social Value (SV) has become a cornerstone for all our bids and proposals. We are also developing our associates and partner networks to best support our customers on complex and challenging projects. Highlights Shaping the future of autonomy We will play a key role in the research, development and deployment of autonomous underwater vessels for the UK’s Royal Navy. A new contract with the Defence Science and Technology Laboratory (Dtsl) maritime research framework will see us partner with SeeByte, Sonardyne International and the National Oceanography Centre (NOC) to shape the role of autonomy for the Royal Navy. (above right) “Our cyber and autonomy teams have proven their ability across leading-edge initiatives.” Monty Long, Regional Future Business Director UK/Eur, BMT BMT Group Ltd | Review of performance 23-24 18 19
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