valeite
09 Jan 2017
deutche downgrades deutche downgrades from buy to hold and reduces target price from £11 to £10.2 ,basically sees a lack of upside
pasak
09 Dec 2016
Re: Bought 920.20 That level was the confluence of two trend lines, as was the PRU sell. It was a limit buy. I had the orders in for days, if not 2-3 weeks. The science is very simple.
Our Haven
09 Dec 2016
Re: Bought 920.20 Well your timing looks spot on for today Pasak. Some of the industrial sector has been doing well against financials post Brexit but it is largely dependent on foreign earnings. Have confidence Babcock will see an upturn soon.
pasak
09 Dec 2016
Bought 920.20 I've bought here at 920.20. I'm hoping this level will represent the moment that the market rotates back to industrials from financials. Sold PRU two days ago at 1645, near the highs. Identifying technical buy/sell levels and working the spreads between sectors in conjunction with the predetermined levels is the safest way I know of getting good returns. Even if I'm wrong, the spread should work in my favour.
Komatsu100
06 Dec 2016
Forecasts on BAB looking good! [link] starBut the medicines mammoth isn't the only Footsie stock with dynamite dividend potential. Indeed, the number crunchers also expect payouts at Babcock International (LSE: BAB) to continue shooting higher in the years ahead.The support services colossus is predicted to hike last year's 25.8p per share dividend to 28p in the 12 months to March 2017, and again to 30.4p next year. Consequently the yield canters to a chunky 3.2% for next year from 3% for 2017.And these spritely projections are underpinned by robust growth projections too. For both 2017 and 2018 Babcock is expected to post earnings advances of 8%, figures that also create ultra-low P/E ratios of 11.7 times and 10.9 times.Babcock saw organic sales miss analysts' targets during April-September, reflecting current contract phasing issues and a weak South African economy. Still, I believe the company's strong order book illustrates the firm's excellent long-term potential -- £2bn worth of new orders pushed the book to £20m in the period. And a bid pipeline of £10.8bn looks set to propel organic growth from 2018.
sharegardener
26 Nov 2016
Re: Half year report some analyst comments on the resultsGoldmanBabcock reported slightly weaker-than-expected 1H16 results this morning, with organic growth of 4% vs. our expectations of 5%. Total revenues and EBITA including JVs was broadly in line (1% ahead) with our estimates as the company benefited from FX and delivered stable profitability. The bid pipeline was replenished successfully and is up to £10.8bn (from £10.5bn at end FY16), reflecting a £3bn intake during the period. Revenue visibility is strong, with 93%/63% of FY17/FY18 revenue already under contract. The group pension deficit went up by £60mn y-o-y, reflecting the change in interest rates (up to £261mn). Cash conversion post capex was 79%, up from 73% in 1H16. The outlook for FY17 was, as usual, qualitative, with Babcock expecting continued good progress for both this year and beyond. Despite the slightly slower organic growth in 1H17, the board expects the full-year results to be in line with its expectations.Overall, 1H17 was slightly weaker-than-expected owing to more pronounced phasing of revenues towards 2H. The organic growth slowdown in 1H17 was largely driven by support services on a slowdown in decommissioning JVs. We believe the company is well on track to deliver 6.8% yoy organic growth rate for the full year supported by improving bid pipeline and stable win rates. While slower 1H growth rates might create some concerns over the outlook, in our view the market expectations were already for organic growth to be weighted more to 2H.JefferiesOn track to meet consensus FY17E expectations. Outlook comments stress that “despite slightly slower organic revenue growth, the Board expects the full-year results to be in line with its expectations. We therefore remain confident of making good progress both this year and beyond”. In our view, FY17E consensus organic revenue growth estimates may drift to c.4% given the H1 trajectory but higher margins offset, and EPS estimates are likely to remain unchanged.Reiterate Buy rating. Our unchanged 1330p price target applies a 17x CY16E PE multiple, which should be attainable given a 9-19x through-the-cycle historical range. At the current share price, the FY17E FCF yield is 5.3% and 6.1% before the additional cash pension payment. Risks include mobilising increasingly large contracts and managing international expansion.
sharegardener
26 Nov 2016
Re: Half year report The presentation webcasts are always worth a listen - but 1 hour long with Q&A! This was Archie Bethels first.BAB are big and international with a diverse spread of complex contracts across military & civilian sectors. To me this makes it difficult to pigeon-hole them into any one category (outsourcing, infrastructure, support services, defence, construction, aviation etc). They are a niche player going after specialist contracts and have a bid win rate consistently around 40% and 90% for contract renewals. A lot of what they do is so specialised they see SSRO (single source regulations office) as a threat but can also be viewed as a strength as there is unlikely to be much competition (nuclear power & subs perhaps).Contracts run over many years so the final return is difficult to estimate. Overall they build long-term customer relations which is reflected in the high renewal rate.PositivesNew contract with French Air Force may be the start of penetration into European military markets - training/simulation as well as maintenance. New dry dock JV in Oman - they already do a lot of naval work in Oz & Canada so expanding footprint is good.Aviation work with AlItalia & Quantas as well as in MCS going wellOrganic growth from better cross-integration and deleveraging debt is being prioritised over more acquisitionsNegativesSome contracts delayed or phasing will push income into 2018/19Bid pipeline & current margins are flat so growth prospects may rely on new customersSouth African contracts struggling at present They see a 2nd Scottish referendum triggered by brexit as a potential threat to the income from nuclear subsAmortisation of intangibles is puzzling (to me!)Im still holding for the long term and aim to buy more if theres a drop below 900pgood luck all, SG
Rhigos
22 Nov 2016
Re: Half year report This is only SP negative thing I can find about BAB[link] from above link:“However analysts said its share price fell on a comment on slower internal growth and concerns for the outsourcing services sector after a second profit-warning in as many months from Mitie on Monday. The shares were down 6 percent at 931 pence by 1154 GMT.”It appears problem is sector related rather than company specific. I would rate it now as a buy.
Trapper Jim
22 Nov 2016
Good buying opportunity Doubled my holding today at 939
Rhigos
22 Nov 2016
Half year report Profits +7%Revenue +6%Operating profit +5%Chief executive Archie Bethel said: "Babcock continues to perform; delivering growth in revenue, profit and earnings, and maintaining healthy levels of cash generation and conversion. The long-term visibility provided by our £20 billion order book and substantial pipeline of opportunities underpins our future growth."Our UK markets remain positive, with the Group well positioned for the significant future outsourcing opportunities expected from both our defence and civil customers, and we see growing international demand for our specialist and complex engineering support services. Despite slightly slower organic growth, the Board expects the full-year results to be in line with its expectations."We therefore remain confident of making good progress both this year and beyond."So why has SP fallen a 4.2% this morning !!!!I must be missing something. Now showing a CG of -4.9%, when last posted in Oct was +2.9%. I should have followed through and sold at least a part of my BAB share holding 
Broker consensus BUY.Waiting for jam tomorrow.
Rhigos
21 Oct 2016
Investors Chronicle article Link to article by Phil Oakley that appeared in last weeks Investors Chronicle on outsourcing companies. There is a lot about BAB.[link] feeling is that BAB spent too much purchasing that helicopter company.I am thinking of selling some of my BAB shares. My CG is only 2.9% and first bought 3.7 years ago. The yield although mostly progressive is modest at forecast 2.75%.
sharegardener
21 Oct 2016
Re: CSS article, buy recommendation Thanks RhigosIt also mentions the recent DSG capital markets presentation which plugs Babcocks involvement with army supply & maintenance contracts etc. Slides have an intoductory overview of all Babs divisions & activity.Link to website here:[link] still holding here as divi growth is respectable and long-term they have an internationally diversified spread of long term contracts. The new CEO replacing Peter Rogers has been with the company a long time. Debt has been restructured with 1.8 BN euro bonds issued at 1.875% out to 2026. Pension deficit is reasonably contained also. Performance of MCS division given problems of North Sea oil is perhaps a concern and government infrastructure tendering is always under pressure to squeeze costs so margins are lower. Theres also the risk that they may not win contract renewals as all 'outsourcing' is also being scrutinised (eg Capita). SP has drifted down since the rights issue but currently good long term value imhoSG
Rhigos
20 Oct 2016
CSS article, buy recommendation The following link is to a research article which includes a feature on BAB with a buy note[link]
Komatsu100
01 Oct 2016
"Buy" recommendation from Shore Capital [link] International has seen a slower performance in the first half but still expects to grow revenues 6% in the full year, broker Shore Capital revealed as it reiterated a 'buy' recommendation on the engineering services outsourcer.With Babcock's shares feeling some effect of the sector turmoil around fellow outsourcer Capita's profit warning on Wednesday, ShoreCap's note after a catch-up with the company's finance director Franco Martinelli was timely, with the company having not issued a trading update since July.Babcock, "in the round", has performed in line with expectations, retaining organic revenue growth guidance in the 6% range for the full year but expecting performance to be slightly weighted to the second half."This is principally due to slower than anticipated conditions in South Africa operations and with oil services related contracts in MCS (helicopters) due to commence in H2. South Africa operations (those mainly in power related activities) are expected to improve in H2," explained analyst Robin Speakman."We sense that Babcock remain broadly positive on the environment and the medium to long term outlook," he added, with the company’s order book remaining stable and indicated to remain at a similar level to the circa-£20bn last reported at the final results in May.The pipeline was reported to have remained stable, with contract opportunities expected by Speakman "to begin to lift the pipeline early next year", with no further news on the award of the Defence Fire Risk Management Organisation contract with the Ministry of Defence for fire services management - also being bid by Serco and Capita.
Komatsu100
01 Oct 2016
Sympathy fall? [link] fall?Fellow engineering services outsourcer Babcock (LSE: BAB) also saw its shares fall today, by 4% to 1,041p. With no adverse news around, I can only think the fall is a sympathetic one in response to Capita's troubles, with some investors assuming the whole sector must be in trouble.Current forecasts indicate a 9% rise in EPS for Babcock this year, putting the shares on a forward P/E multiple for the year to March 2017 of 13. That's with a dividend yield of 2.7%, and there was net debt on the books of £1.2bn at the last year-end -- though that was falling and is expected to reduce even further this year.Babcock's recent update in July suggested there's still some Brexit uncertainty, but the firm reckons it's in good shape with strong pipeline visibility -- 85% of anticipated 2016/17 revenue is already in place, it seems, followed by 56% for 2017/18.Babcock's house broker Shore Capital has chosen today to tell us it still expects to see 6% revenue growth this year. While enthusiasm from a firm's own broker should be treated cautiously, it does suggest that Babcock doesn't have any shocks for us in the pipeline -- and it provides a bit of feedback while we await first-half results, which aren't due until 22 November.For me, Babcock looks a far safer investment than Capita right now.
