Babcock International Group PLC
29 January 2008
29 January 2008
Babcock International Group PLC
Interim Management Statement
In accordance with the requirements of the Disclosure and Transparency Rules,
Babcock International Group PLC (Babcock), the support services company, today
provides an Interim Management Statement for the period from 1 October 2007.
Trading remains in line with the Group's expectations at the time of the Interim
Results. The Rail division continues to make progress and is expected to trade
profitably during the second half of the financial year. Across all divisions,
current contracts are performing as expected and new contracts are starting as
planned. Framework contracts within the Rail and Networks divisions continue to
grow and are delivering a steady schedule of work.
As announced on 23 January, building on its successful relationship with British
Energy, Alstec has been awarded a contract to provide support for the UK fleet
of seven Advanced Gas Reactor (AGR) power stations. The contract is anticipated
by Alstec to be worth in excess of £70 million for work starting in April 2008
running through until 2012. British Energy has options to extend the contract
through the operating lives of the AGR power stations including Stage 1 of
decommissioning work, a process that could extend beyond 2020. This contract
highlights the Group's opportunities for expansion in the nuclear market,
reflecting both Alstec's nuclear engineering expertise and the Babcock
partnership approach to the management of critical assets.
In the Marine division, Supply Chain Services has been selected as preferred
bidder to provide spares for the Ministry of Defence Ground Support Equipment.
The contract is worth £25 million over five years, with an option for a further
five years. Design and Technology and Engineering Products have won a number of
commercial contracts and on-going warship refit work is being allocated as
programmed through the Surface Ship Support Alliance. We expect DML to be fully
integrated into the Marine division by the end of this financial year.
Discussions with the Ministry of Defence on the Terms of Business Agreement with
respect to submarine support continue to progress.
The award of the manufacturing contracts for the CVF is expected once the
Ministry of Defence has completed its Planning Round. This is likely to be
before the end of March.
Growth prospects in South Africa remain excellent and the level of support
required by Eskom to maintain its power stations and extend its high voltage
network continues to increase significantly. We have recently been awarded a
contract for the erection of a major overhead powerline in South Africa and
orders to provide support for the design and build of Eskom's new power stations
are expected in the next few months.
As announced on 22 January 2008, Babcock has entered into an agreement with INS
Nuclear Solutions plc (INS) to acquire 100% of the issued share capital of INS
Innovation Ltd for £39.8 million. INS Innovation is the sole operating business
of INS. The acquisition is subject to the approval of INS shareholders. The
Board of INS is also seeking shareholder approval for the cancellation of the
quotation of INS's ordinary shares on AIM following completion of the disposal.
Babcock currently owns 68% of the issued share capital of INS and will
subsequently receive back 68% of the purchase price after costs.
Other than disclosed above, there has been no significant change in the
financial position of the Group in the period. The Board remains confident that
the results for the year to March 2008 will meet its expectations.
Enquiries:
Babcock International Group PLC 020 7291 5000
Peter Rogers
Bill Tame
FD 020 7269 7121
Andrew Lorenz 07775 641 807
Sophie Kernon 07802 877 243
This information is provided by RNS
The company news service from the London Stock Exchange
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