1st Apr 2008 07:00
Babcock International Group PLC01 April 2008 1 April 2008 Babcock International Group PLC Trading Update Babcock International Group PLC (Babcock) is providing the following update ontrading as it enters its close period prior to announcing Preliminary Results on13 May 2008. We anticipate that results for the year ended 31 March 2008 will be in line withour expectations. Trading has continued satisfactorily since the time of ourInterim Management Statement on 29 January 2008. Marine The new management structure for Babcock Marine is in place and the operationsat Devonport have been fully integrated into the division. We have noted thecommitments made by Ministers and the Ministry of Defence to the future ofDevonport and continue to look forward with confidence to long-term work streamsat the dockyard. Marine has traded well throughout the year benefiting fromsteady warship refit work at Devonport and Rosyth and submarine refuelling andmaintenance work at Devonport and Faslane. Negotiations with the Ministry ofDefence relating to the Terms of Business Agreement for submarine supportcontinue to progress, although we would not expect these to be concluded untilthe second half of the calendar year. We remain confident that the manufacturing contracts for the CVF (FutureAircraft Carrier) will be signed shortly. In February the civil engineeringcontract for the modifications to the dock area at Rosyth was signed, witnessedby the Secretary of State for Defence. The cost of the works, which will enablethe assembly of the new carriers, is being paid for by the Ministry of Defence.This marks a significant milestone in the CVF project. Nuclear From 1 April a separate division will be created to combine our civil nuclearcapabilities. This reflects the position of strength we have built in the civilnuclear engineering market through the acquisitions of Alstec and INS adding toour existing capabilities. We believe this market holds significantopportunities for us in the future. Defence Services The division has traded steadily throughout the year with the multi activitycontracts and the two Regional Prime contracts performing in line withexpectations. The Building Schools for the Future (BSF) contract with Hackneyis moving towards financial close and the bid process for BSF Southwark isproceeding as planned. The Royal School of Military Engineering PPP continuesto progress well with financial close planned by the end of June. Rail As we anticipated, the division has improved its performance significantly andhas traded profitably throughout the second half. Work carried out by thedivision during the Christmas and Easter periods was all completed on time andwithin budget. Engineering and Plant The opportunities for continued growth are strong. The South African governmentremains committed to increase significantly the supply of electricity throughoutthe country. We are well positioned to support Eskom and the OEM suppliers inthe construction of new generation capacity, as well as in the recommissioningof mothballed power stations and the provision of outage support on operationalpower stations. The Powerlines business has shown strong growth with asignificant increase in the order book throughout the year. The demand for Volvo equipment has increased further over the most recentquarter, with a record number of orders being taken in February. There arecurrently no signs of a weakening in demand. Networks The division has traded steadily through the year. In the transmission businessthe Electricity Alliance with National Grid and the alliance with EDF EnergySolutions continue to operate smoothly. In addition we have been successful inwinning further contracts with Scottish Power. Access to skilled resourceremains an issue across the industry. To alleviate this situation we areseeking to expand our design office in Sofia, Bulgaria as well as maintaining asignificant training programme to provide the necessary levels of support forthe division. In the communications business, as signalled previously, the mobiletelecommunications market has continued to be slow although we are starting tosee a number of new opportunities coming through. The broadcast market remainsactive in preparation for the completion of Digital Switchover by 2012. Outlook The markets in which we operate are attractive. The strong positions we hold inthese markets and the long-term relationships we have developed with our keycustomers have underpinned our performance in the year just ended and make usconfident of further progress in the new financial year. Enquiries Babcock International Group PLC 020 7291 5000Peter Rogers Chief ExecutiveBill Tame Finance Director FD 020 7269 7121Richard Mountain This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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