Shaping the future - a review of performance for 2021

Operating performance | Defence and Security Customer Friend Market context During the reporting year we saw the impact of both the global economic recovery and continuing pressure on governmental budgets. The impact on defence spending in the UK was characterised by a reduction in available funding for resources but an increase in government capital expenditure as a resurgent Russia and emergent China changed the strategic context. Future UK spending was detailed in the 2020 Integrated Review and indicated a shifting emphasis to investment in: research and development (science and technology); cyber, space and digital enablers and the establishment of a major shipbuilding pipeline. In addition, it featured a multi-billionpound investment in strengthening nuclear and conventional deterrent capabilities in both the North Atlantic and Asia Pacific, with a focus on underwater battlespace (UWB). The competition to secure and maintain longterm government support contracts is strong with companies collaborating, teaming, and developing joint ventures. Large companies are willing to compete for high volume, low margin work to provide long-term security or other corporate or operational benefits. We provide independent engineering, design, management and programme consultancy services in the ‘five eyes’ defence and security markets of Australia, Canada, the US and the UK. Our technical expertise, collaborative approach and impartiality help our customers to meet their most complex engineering and programme challenges. Performance Despite the challenges related to government spending, performance across our defence and security services was strong. This reflects the reputation that we have developed as a reliable, independent technical advisor and customer friend trusted to play an essential role in the successful delivery of capital equipment and change programme activity. As a result, we experienced continued and progressive growth of both design and engineering support as well as asset performance services business lines, especially in the digital and underwater areas of the UK Ministry of Defence (MOD). Our technical and management consultancy business line has also continued to perform strongly, winning repeated work with London’s Metropolitan Police. Strategy and organisation In the UK, we are well placed to seize the opportunities from a clear shift towards more data-centric, digitally driven and autonomy-enabled future defence forces. Outside the UK, we are focused on extending our capabilities in Canada with a new office in Victoria, British Columbia, expanded office capacity in Halifax, Nova Scotia and are taking the first steps towards office expansion in Ottawa, Ontario. Increasing shortages of skilled people across the defence industry and specifically combat system engineering, integrated logistics support (ILS), safety and training services is allowing us to capitalise on the increased outsourcing of project engineering and management to increase revenue. BMT Group | Shaping our future 16