Updates

Babcock International - Sharp reduction in borrowings

January 2010

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Since our last update two months ago, shares in defence services firm Babcock have risen nearly 50p. This momentum was driven by interim results, which noted a 24% increase in pretax profit to £71.8m. Eps improved 24% to 25p, while net borrowings reduced sharply from £374m to £314m. Meanwhile its order book was maintained at £6bn.Babcock is a major beneficiary of the MoD's desperate need to outsource non-essential services in order to cope with budget squeezes. Marine, its warship refit and maintenance division, grew operating profit 29% to £54.3m (60% of profit). This arose as a result of steady work on surface ships and submarines, as well as substantial design work on the new Queen Elizabeth aircra ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

Babcock International - Sharp reduction in borrowings

January 2010

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