Austal gets $300m boost with new contracts

Austal will build another two patrol boats for the Royal Australian Navy and maintain two vessels it has already delivered to Trinidad and Tobago under new contracts worth a combined $300 million.

Plans to construct another two Evolved Cape-class patrol boats for RAN were announced by the former Morrison government during the Federal election campaign in April but have now been officially ordered with the Henderson-based shipbuilder.

Austal has already delivered the first of six of the 58m patrol boats commissioned under a contract awarded in early 2020. The remaining five vessels under the initial order are in various stages of production.

The two new vessels — worth $110m — bring the total number to be delivered to eight and extend production at the Henderson shipyard through to 2024.

Austal will also maintain two Cape-class patrol boats it built for the Trinidad and Tobago Coast Guard for the next two years.

Chief executive Paddy Gregg said the contract helped to diversify the company’s long-term revenue base while using its shipbuilding and support expertise.

“We have been very clear that we want to grow Austal’s support business and this is a perfect example of how Austal can support vessels constructed so that not only do the vessels continue to perform optimally for our clients, but also create a recurring revenue stream post-construction,” Mr Gregg said.

Austal also announced it would undertake the detailed design and construction of a new 211m-long floating dry dock for the US Navy. It will have a lifting capacity of more than 18,000 tonnes and working area of nearly 8500sqm and be capable of servicing large vessels such as Littoral combat ships, guided missile destroyers, guided missile cruisers and landing ship docks.

Shares in the company were little changed by 9.50am at $1.85.

The awarding of the new contracts come just days after Austal revealed in a substantial shareholder disclosure to the market that WA mining billionaire Andrew Forrest has become its biggest shareholder.

The Fortescue Metals Group founder’s private investment vehicle Tattarang spent another $41.1 million between May 27 and last Thursday buying up more stock and taking its voting power in the company from 7.567 per cent to 13.794 per cent, leapfrogging other major shareholders John Rothwell, Macquarie, Vanguard and Blackrock.

Tattarang has now poured close to $60m into purchasing stock since late last year..