Babcock International optimistic about 2010 after strong Q3

Babcock International (LSE: BAB) said trading in the second half remained consisted with expectations outlined in its interim results released in November, reporting an order book of £6 billion and assessing the long term growth prospects in its markets as “excellent".

The group’s marine division has secured an order for Jackal 2 patrol vehicles, which will start production this month. Over 400 Jackal type vehicles have already been delivered by Babcock to the Ministry of Defence (MoD) under Urgent Operation Requirements (UOR) since 2007. Babcock added that the terms of a business agreement received approval from MoD’s Investment Approval Board in January, and it is expecting to achieve final signature before the end of the financial year.

All key contracts in the Defence division have also performed well, continuing to meet the group’s and its customers’ financial and performance targets. Babcock expects the Nuclear Decommissioning Agency to focus on the UK nuclear decommissioning programme, which would lead to acceleration in project tenders during the next financial year to the benefit of its Nuclear division.

The group is set to incur a £4 million cost stemming from the restructuring of its Rail division and a £1.5 million cost after exiting its Irish telecommunications business. Babcock is expecting its Network division to benefit from the £4.7 billion investment programme required to upgrade the UK's national electricity transmission infrastructure in anticipation of increasing output from renewable and nuclear energy sources.

Shares in the group added 5% on the statement.

http://www.proactiveinvestors.co.uk/companies/news/12867/babcock-international-optimistic-about-2010-after-strong-q3-12867.html