sharegardener
06 Sep 2017
Navy shipbuilding MoD announcing new strategy for navy frigates 31e class that will be capped at £250M apiece. Expands on Sir John Parker's report from last year about naval shipbuilding strategy to aim for export market. (He was previously Babcock CEO through the 90's)[link] giant Babcock has welcomed the news that Plymouth’s dockyard could play a part in the construction of a new fleet of multimillion warships.Following a review of how Royal Navy ships are built, the defence secretary has announced that the Type 31e frigates could be constructed in blocks across several British shipyards and then assembled at a central hub.Sir Michael Fallon said the first batch of new frigates would be built with the export market in mind, with the UK shipbuilding industry potentially serving both the Royal Navy and navies of allies and partners.The news has prompted hopes that Devonport Dockyard could once again play a key role in ship construction.A spokesman for Babcock, which operates the dockyard, said: “We welcome the UK Government’s announcement on the National Shipbuilding Strategy and the potential opportunities this could create for Babcock and the wider UK supply chain.”Babcock was formally awarded and has begun mobilisation to deliver all four elements of a Ministry of Defence (MoD) programme to become the Marine Systems Support Partner and Systems Technical Authority for the Royal Navy's new Queen Elizabeth Class Aircraft Carriers and Type 45 Destroyers, expected to be worth more than £360million over seven years.The Babcock spokesman added: “We are also pleased to see that this new strategy adopts a key recommendation from Sir John Parker’s report and builds on the lessons from the successful Queen Elizabeth Class Aircraft Carrier programme.”'Also reported in the FT - commenting on BAE's monopoly.There is some scepticism around both our own naval capabilities and the attractiveness of UK warships for export. Overall it looks like Babcock should benefit.SG
sharegardener
16 Aug 2017
Re: Babcock wins £500 million Norway d... Hi Komatsu,RNS about this was released on 29th June. It reaffirms their expertise in air ambulance services and they havent been in Norway before. The £500M is the 11 year contract value but it appears they are only signed up for 6 years with option to extend after this.BAB still looking like a solid diversified business overall but the lack of rise in SP implies that some people are wary.SG
Komatsu100
15 Aug 2017
Babcock wins £500 million Norway deal [link]
schovald
26 May 2017
Re: Times- Tempus IC give it a as a buy too.
nk1999
25 May 2017
Times- Tempus "There are three main factors to look at when judging an engineer and outsourcer such as Babcock International. One is the rate at which it can grow revenues year-on-year organically, whatever the effect of exchange rate movements or other one-offs. Babcock has indicated it can grow at a rate of about 5 per cent, and the outcome for the year to the end of March was indeed 4.9 per cent, with an acceleration to 6 per cent in the second half.The second is the rate at which work is replenished. Babcock ..............The third factor is the margins such work is carried out on, which has been the downfall of outsourcers in the past as a deterioration in performance has made it unprofitable. Margins at its defence business, which includes looking after army vehicles, and at marine and technology, the UK naval work, are solid enough, while it would take a brave MoD bureaucrat to risk an upset by awarding these long-running contracts to anyone else.......The earlier mistrust over Babcock appears to be dissipating and at least one broker was turning positive yesterday. The shares lost 10p to 959½p after a surge in recent days and sell on a modest 11 times earnings.My advice BuyWhy Babcock is now heading forward on all measures with an assured workload and attractive margins, and the shares have come back too far"
Rhigos
24 May 2017
Deutsche Bank broker note YESTERDAY [link] above link:"A bullish broker note also lifted Babcock International 32p to £13.01. Ahead of its full-year results on Wednesday, Deutsche Bank said the blue chip stock could rebound further if it posted a solid set of full-year results."Yesterday SP rose nearly 3% today after good results released today SP down 1.2%. Seems suspicious to me. Maybe clever analysts were able to work out what results would be or - I dare say no more.
valeite
24 May 2017
liberum cap... says buy BAB and raises target price to £11 from £9.6
nk1999
28 Mar 2017
Peel Hunt From Citywire:"Peel Hunt: Babcock still a ‘buy’ despite Magnox terminationEngineering support services company Babcock (BAB) has announced the end of its Magnox nuclear power station decommissioning contract but Peel Hunt is unconcerned about the short-term financial impact. Analyst Christopher Bamberry retained his ‘buy’ recommendation and target price of £10.85 on the stock after Cavendish Fluor – in which Babcock has a 65% stake – said it had come to a ‘mutual agreement’ with the UK’s Nuclear Decommissioning Authority (NDA) to end Magnox at the end of August 2019. ‘The work that needs to be done [on Magnox] is now materially different in volume from that specified in the tender, and this puts the contract at risk of a legal challenge,’ said Bamberry. ‘Termination is no reflection on Cavendish Fluor. The change to the contract will result in a c.£100 million annual step down in revenue from full-year 20121. The contract change is not expected to have any negative financial impact over the next three years.’ Babcock shares dropped nearly 35p or 3.8% to 881.6p on Monday."
Our Haven
28 Mar 2017
Re: SP fall after decommissioning contra... I would like to hope we have bottomed but momentum against the stock is strong so I fear this is not the bottom. Holding so here is hoping I am wrong.
Rhigos
27 Mar 2017
Re: SP fall after decommissioning contract e... Sent early by accidentMeant to add could be a buying opportunity now SP fallen so much. Decommissioning nuclear power stations a high risk business which they could have lost money on.
Rhigos
27 Mar 2017
SP fall after decommissioning contract end There were three new broker views out today on BAB, all buys and a director bought shares however SP falls very sharply because of .[link] International shares fell in early trading on Monday after the UK engineering company said it would end its contract with Britain’s Nuclear Decommissioning Authority in 2019 for the clean up of 12 Magnox reactor sites in the UK."
sharegardener
16 Mar 2017
Realignment presentation Hi all,there may well be a few broker/analyst emissions following on from yesterdays presentation and Q&A. The webcast and slides are up on the website - replay takes about an hour. All subjective and aimed at putting the best gloss on their business of course. The existing 4 divisions are regrouping into Sectors. (slide 18) essentially it becomes ground (Land), air (Aviation), water (Marine) and atom (Cavendish Nuclear). The aim is to build on growth but cost agnostic.Archie Bethel new CEO gave an overview of BABs main activities and a run through of his 5 year strategy review - as you would expect of an incoming CEO, though he has been at Babcock a long time. He specifically said he wasnt giving any new guidance on this years performance which will only come out at the finals in May.The main emphasis was on BABs areas of future growth, pushing their UK formula into international markets. The combination of engineering expertise around complex infrastructure and their long customer relationships give high barriers to entry but the slides give detail on their main contracts with values, the competition and growth prospects.They will integrate training with maintenance of fleet across military and civilian areas. They are particularly pleased at winning the French Airforce contract but think this approach has potential into other countries and across civil aviation as well as other fleets eg Fire and Police etc.The usual analyst crowd were asking tame Qs. (Cr Suisse, Liberum, Jefferies, Deutche etc)The main responses I noted were - South Africa flat with little growth prospect- Rail has improved to 6% margin from 3% but keen to offload as long term returns are poor value- the new sectors will take time to bed in but will be more efficient with tech support and with improved flexibility for overseas contracts.- keen to develop dockyard contracts and see growth potential worldwideMy impression is that BAB have very diverse expertise and a high contract renewal rate. They are targeting non-military and international bids as well as having a strong and long term military offering. The trouble is that contracts may only produce returns over 10 years or more so visibility of earnings & cash flow not always clear (to me).No one mentioned Faslane & Rosyth in relation to the Scotland uncertainties in fact I dont recall mention of Brexit either!The share price has struggled ever since the Avincis rights issue but to me looks oversold at 900p. Im holding for the long term as divi returns are fairly consistent and the growth prospects sound realistic with a focused management team. We will hear of this years progress in May.SG
nk1999
15 Mar 2017
Re: liberum note says buy Some details from ADVFN:"Engineering support and outsourcing company Babcock got a boost on Wednesday as Liberum upgraded its stance on the stock to 'buy' from 'hold', maintaining its 960p price target.The brokerage attributed the upgrade to the fall in the share price and attractive metrics relative to the peer group.In addition, it noted the business should deliver 6-7% revenue growth in 2018, which makes it too cheap to ignore.The brokerage said the company trading statement in February guided to an in-line performance. It expects total group revenue of £5.1bn in FY17 versus £4.8bn in FY16 at a steady margin of 11.4% compared to 11.1%.Liberum forecasts total profit of £576m in FY17 versus £540m and maintains its estimate for FY17 underlying earnings per share of 80.2p compared to 74.3p. It reckons the dividend will be upped by 8.1% to 27.9p.The brokerage noted that at the seminar, management re-iterated overall guidance of 6-7% organic revenue growth, and it expects that around 1.5% growth will come from the contracts on the Met Police, Qantas and FOMEDEC (French aircraft training)."We believe that this growth is achievable and makes Babcock stand out in a market bereft of growth."
valeite
15 Mar 2017
liberum note says buy new price target £9.6
nk1999
26 Jan 2017
Shore Capital From ADVFN:"Following BT's shock profit warning linked to a deteriorating outlook for UK public sector work, broker Shore Capital wondered "when will Babcock warn?"Babcock's shares fell around 2% on Wednesday as investors read across the implications from BT and had also fallen in sympathy with Capita when it warned on profits last year.With circa 70% of the group de-facto dependent upon the UK public sector, ShoreCap felt the market was expecting a similar warning from Babcock, even though the profile of services delivered and the infrastructure supported is "more than a little bit different" to BT and Capita."Babcock supports essential and critical infrastructure with professional engineering support services that attract less discretionary spend, but still support additional ancillary revenues. We see a very different, lesser revenue flow 'risky' profile," wrote analyst Robin Speakman."This is not to say that pressures on UK public spending are having no effect on Babcock, it cannot be totally immune, but it is difficult to delay spending on that decommissioning nuclear reactor, in servicing that submarine, or leaving a gap in national electricity grid infrastructure."He said Babcock undoubtedly has other issues to address, namely convincing investors of the strength of its long term profitable growth potential.But the weakness in the shares was a long term buying opportunity, the analyst said investors should not have too long to wait as the company updates on its third quarter on or about 28 February.Looking at the new financial year, he pointed out that Babcock shares were trading at 10.6 times 2018 forecast earnings on a free cash flow yield of circa 8.0% with debt-to-EBITDA falling to circa 1.4 times.Speakman is not alone, with Morgan Stanley recently expressing its preference for Babcock among the government outsourcers, with the continuing pressure on growth due to increased competition and fewer large outsourcing opportunities seen as more of a worry for Capita."
