Source: Sharecast
The company said it now expects revenue in the year to March 31 to come in at £4.9bn compared with forecasts of £4.51bn - £4.78bn and underlying operating profit to beat the top end of a £327.1m - £339.7m range. Babcock stock jumped 7.5% on the news.
Babcock on Thursday said its first-half strong trading performance had continued throughout the third quarter of the year, and the preliminary view of performance in January was also “encouraging”.
“In nuclear, growth is driven by increased new build and decommissioning work in civil nuclear, as well as increased submarine support activity and higher than originally expected infrastructure revenues. In marine, the growth is enhanced by higher LGE volumes as well as the ramp-up of the (UK military satellite) Skynet programme,” the company said on Thursday.
Broker Shore Capital maintained its 'buy' rating on Babcock shares, noting that "positive secular trends around defence spending and nuclear investment and decommissioning" would create strong value in Babcock’s fundamental multiples, "especially as the balance sheet continues to strengthen".
"We hope to see further upgrade opportunities emerge as we enter Babcock’s new financial year with more granular and firmer guidance," they added.
Reporting by Frank Prenesti for Sharecast.com
