29th Jan 2008 07:00
Babcock International Group PLC29 January 2008 29 January 2008 Babcock International Group PLCInterim Management Statement In accordance with the requirements of the Disclosure and Transparency Rules,Babcock International Group PLC (Babcock), the support services company, todayprovides 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 InterimResults. The Rail division continues to make progress and is expected to tradeprofitably during the second half of the financial year. Across all divisions,current contracts are performing as expected and new contracts are starting asplanned. Framework contracts within the Rail and Networks divisions continue togrow and are delivering a steady schedule of work. As announced on 23 January, building on its successful relationship with BritishEnergy, Alstec has been awarded a contract to provide support for the UK fleetof seven Advanced Gas Reactor (AGR) power stations. The contract is anticipatedby Alstec to be worth in excess of £70 million for work starting in April 2008running through until 2012. British Energy has options to extend the contractthrough the operating lives of the AGR power stations including Stage 1 ofdecommissioning work, a process that could extend beyond 2020. This contracthighlights the Group's opportunities for expansion in the nuclear market,reflecting both Alstec's nuclear engineering expertise and the Babcockpartnership approach to the management of critical assets. In the Marine division, Supply Chain Services has been selected as preferredbidder 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 furtherfive years. Design and Technology and Engineering Products have won a number ofcommercial contracts and on-going warship refit work is being allocated asprogrammed through the Surface Ship Support Alliance. We expect DML to be fullyintegrated into the Marine division by the end of this financial year.Discussions with the Ministry of Defence on the Terms of Business Agreement withrespect to submarine support continue to progress. The award of the manufacturing contracts for the CVF is expected once theMinistry of Defence has completed its Planning Round. This is likely to bebefore the end of March. Growth prospects in South Africa remain excellent and the level of supportrequired by Eskom to maintain its power stations and extend its high voltagenetwork continues to increase significantly. We have recently been awarded acontract for the erection of a major overhead powerline in South Africa andorders to provide support for the design and build of Eskom's new power stationsare expected in the next few months. As announced on 22 January 2008, Babcock has entered into an agreement with INSNuclear Solutions plc (INS) to acquire 100% of the issued share capital of INSInnovation Ltd for £39.8 million. INS Innovation is the sole operating businessof INS. The acquisition is subject to the approval of INS shareholders. TheBoard of INS is also seeking shareholder approval for the cancellation of thequotation of INS's ordinary shares on AIM following completion of the disposal.Babcock currently owns 68% of the issued share capital of INS and willsubsequently receive back 68% of the purchase price after costs. Other than disclosed above, there has been no significant change in thefinancial position of the Group in the period. The Board remains confident thatthe results for the year to March 2008 will meet its expectations. Enquiries: Babcock International Group PLC 020 7291 5000Peter RogersBill Tame FD 020 7269 7121Andrew Lorenz 07775 641 807Sophie Kernon 07802 877 243 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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