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20 Sep 17. Babcock shares climb on reassurance that the business is on track to meet expectations. Babcock International’s shares were motoring up in morning trading, as the engineering services company announced its revenues were on track to meet full-year expectations. The firm’s shares have been on a three-year downward spiral, as it got stuck into an operational review and Brexit raised concerns about its order book. But Babcock said in a trading update this morning that the order book and pipeline of opportunities “remained stable” and “continue to provide confidence in our ability to grow revenue as expected over the medium term”. The group said it had 89 per cent of revenue in place for the 2017/18 year and around 57 per cent for 2018/19.
Its operational review was making progress in all four sectors of the business, it added, with a number of contracts won since the start of the financial year.
The marine sector has begun working on the £360m contract to support the Royal Navy’s new aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales, and Type 45 destroyers.
Babcok said it welcomed the publication of the government’s National Shipbuilding Strategy earlier this month which would create potential further opportunities.
It has also secured a new seven-year contract for the design, production and delivery of weapons handling and launch equipment for the South Korean Jangbogo III submarine.
Meanwhile in the aviation sector, the business has begun to deliver its £500m emergency medical services contract in Norway and has won contracts to work for the emergency services in the Netherlands, Spain and Australia.
In the land business, Babcock is continuing to work with customers such as the Ministry of Defence, the emergency services and airlines, as a slowdown in the rail business has been offset in other areas.
And in the nuclear sector, Babcock is participating in the tender process for the Sellafield decommissioning and is designing the Wylfa Newydd radioactive waste facility for Japan’s JGC Corporation.
Shares were up 2.5 per cent at the time of writing, as analysts at Liberum and Panmure Gordon reaffirmed their “buy” rating. (Source: City AM)
19 Sep 17. US Air Force secretary: No concerns over Northrop-Orbital agreement. Secretary of the U.S. Air Force Heather Wilson has no concerns “at this point” over Northrop Grumman’s proposed acquisition of Orbital ATK, but said the service will keep a close eye on how things move forward.
“I don’t have any concerns at this point,” Wilson told Defense News in an interview at the Air Force Association’s annual conference on Sept. 19. “Obviously, we watch these things and make sure that no matter [what] happens when companies acquire other companies that the Air Force gets what it needs and that contracts are complied with.”
Northrop announced Monday it will be buying Orbital for more than $9.2bn, in a move that caught industry largely by surprise. It represents the second major defense acquisition of the month, following a United Technologies Corporation announcement that it intends to purchase Rockwell Collins for $30bn.
That churn isn’t a surprise to Wilson.
“There’s a lot happening in defense and space at the moment, so it’s not a surprise to me that companies would be looking to acquire other companies, position themselves for the future; and in some ways it’s an indication of the health of the sector that there’s a lot going on,” she said.
One potential concern for the acquisition involves the Ground Based Strategic Deterrent program, which will replace the Air Force’s Minuteman III intercontinental ballistic missiles. The Air Force had mandated that both Orbital ATK and its prime competitor, Aerojet