(Corrects in second paragraph to show MoD is largest customer,
not that company generates more than half its revenue from the
By Li-mei Hoang
LONDON, July 21 British engineering contractor
Babcock said on Monday its order book for the coming
year had risen to 13.5 billion pounds ($23.1 billion), helped by
recent contract wins and its acquisition of helicopter transport
The 123-year-old group, whose largest customer is Britain's
Ministry of Defence, said first-quarter trading was in line with
its expectations and that its bid pipeline stood at 16 billion.
The company said the completion of its acquisition of
Avincis added 2 billion pounds to its order book, and that good
progress had been made in the planned refinancing of the
helicopter transport firm's debt.
It is expected to post a pretax profit of 418.89 million for
the full year ending March 31, according to a Thomson Reuters
poll of 10 analysts.
CEO Peter Rogers told Reuters in a interview last week he
was aiming for organic or self-generated earnings growth of up
to 10 percent.
Babcock has profited over the past few years as military and
engineering clients, under pressure from tighter government
budgets, outsourced work to cut costs.
The nature of contracts such as warship maintenance and
refitting and nuclear decommissioning, which tend to be complex
and long-term, has helped it steer clear of the scandals and
close scrutiny that have hit some of its biggest outsourcing
peers, including Serco and G4S.
Shares in Babcock rose 2 percent to 1123 pence by 0721 GMT,
making it the second-highest riser in the FTSE 100
"Babcock's interim management statement reassures on several
fronts," said analysts at brokerage Jefferies, who have a "buy"
rating on the stock.
"Activity levels remain high, key markets remain positive,
2015 full-year trading is expected to be in line with
expectations despite recent FX (foreign exchange) movements and
integration of Avincis is progressing well," they added.
($1 = 0.5850 British Pounds)
(Editing by Mark Potter and David Holmes)