TURNOVER at Hampshire shipbuilder and support services giant VT has crashed through the £1 billion barrier for the first time.

The milestone was passed with profits at the Hedge End based business leaping more than 20 per cent to £74.2m.

VT's traditional shipbuilding business accounted for £600m worth of business with deals being done with navies of Oman and Trinidad and Tobago.

But the support services arm, which has seen relentless growth over recent years, was again the star performer.

A £3billion deal with the Ministry of Defence to train military pilots was the highlight of the year, with contracts to build and run schools in Greenwich and Lewisham contributing £500m.

VT group chairman Michael Jeffries commented: "The Group continues to make good progress and has reached another milestone by achieving Group Revenue of more than £1 billion for the first time.

"We continue to grow the order book and the past few months have given us additional long-term visibility of earnings with notable success in the UK Military Flying Training System and Building Schools for the Future programmes. We are also confident that other major programmes important to the Group's development will make progress in the near future."

Plans to merge its shipbuilding interests with fellow Hampshire defence firm BAE are well advanced and were "expected" to go ahead, leaving VT to focus on its lucrative support services work said Mr Jeffries.

"Our shipbuilding division has secured major export successes and the expected consolidation of the industry will strengthen this part of the business," he said. "We will then be well positioned to expand further our support services activities, which will be a key feature in driving the future growth of the Group."

An announcement on the deal is expected later this summer, but is thought to be dependent on the Government giving the green light to building two future aircraft carriers.

Construction of the carriers would be the main work of the joint venture, which would be expected to have a turnover of more than £700m and to employ about 6,850 people, including 600 staff at its £50m state of the art shipbuilding facility in Portsmouth.