WEIR Group's Strachan & Henshaw subsidiary should announce a #70m contract for weapons systems for the Navy's new Astute-class submarines within weeks.
At this value, the contract will be three times Strachan & Henshaw's entire fourth-quarter order intake of #24m, unveiled yesterday. It will be significant even in the context of Weir's #637m turnover in the year to December 1997.
An engineering industry source said Bristol-based Strachan & Henshaw has already secured the contract to design and build weapon-handling and discharge systems for the three nuclear-
powered Astute submarines, which are due to enter service early in the new millennium.
The source, who was close to negotiations said that Strachan &
Henshaw had ''got it''. The weapons systems contract will be let by submarine builder GEC Marconi.
''It is just a question of when we sign the contract,'' he added.
An announcement, he said, would come within ''a matter of weeks''.
News of the contract could provide a much-needed boost to Weir's share price. It plunged from a 304.5p closing high on March 18 to a low of 161.5p in September, as the engineering sector went out of fashion. The shares have since recovered but only to 197.5p.
The Astute weapons systems work could be drip-fed over two to three years, the source said.
Weir announced yesterday that it had been awarded a significant contract to modernise and enhance the weapon-handling and discharge systems of four second-hand Upholder class submarines which are being sold to the
Canadian Navy.
Glasgow-based Weir said this was the largest single element of the #24m of orders secured by Strachan & Henshaw in the final quarter of last year. It added: ''Further large contracts are expected soon for the Astute class submarines.''
GEC Marconi was named prime contractor for these in 1997. Although nuclear-powered, the Astute vessels will differ from
Trident because they will not carry nuclear weapons.
Weir said Strachan & Henshaw had been the design authority to the Ministry of Defence for weapon-handling and discharge systems for the last 25 years and added that this support commitment had now been extended for another five years.
Strachan & Henshaw also won orders from the nuclear power
sector in the fourth quarter. Magnox Electric awarded it contracts to refurbish and replace equipment at its Bradwell nuclear station, in Essex, and at Dungeness in Kent.
The Manchester-based Bridgetest Holdings operations, acquired by Weir last April, won a package of contracts from British Nuclear Fuels (BNFL). These will see it provide material-handling equipment and flask-transfer assemblies for the UK market, and lend support on overseas contracts.
Strachan & Henshaw is reaping the rewards of its decision to beef up support activities such as servicing of its own and other people's equipment for customers.
To this end, Gavin Borland joined it as a director from Weir's engineering services subsidiary in July last year.
Peter Brooks, Strachan & Henshaw's business development director, said of the #24m of contract wins: ''This set of orders, won despite difficult market conditions, will provide solid workload, particularly in our support and after-sales business units.''
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