Engineering support services provider Babcock is the company that maintains Britain’s submarine fleet.... Very bullish set of recent interim for period since 1 OCtober 2008 - http://www.stockopedia.com/news/announcement/BAB/090203bab6515m.htm.
- Trading conditions continue to be strong and Group performance remains in line with expectations
- Markets in which the Marine, Nuclear, Defence and Networks divisions operate remain resilient and activity levels remain high, with the performance of all major contracts proceeding as planned.
- The two question-marks are a) rail and b) South Africa. For its rail division, the company said that the volumes for track Renewals and signalling remained robust but it added that it had initiated restructuring to focus on the more profitable areas of the business (which seems to be code for the fact that it isn't actually doing very well).
- The company noted that outage support for Eskom's power stations in South Africa remains very strong. However, Babcock said that it has undertaken action to reduce inventory levels and overheads in line with the lower level of activity.
- Funding lines remain secure with committed five year revolving credit facilities of £600 million running through to 2012.
- Separately, the CEO indicated that they are expecting an increase in outsourcing work opportunities from its biggest customer the Ministry of Defence (MoD), while seeking small acquisitions in overseas markets such as Eastern Europe.
