Shares in Babcock International (LON:BAB) have rallied in London in today’s session, as the company reiterated its full-year expectations. The engineering services group further noted that it had made progress across all sectors of its business.
As of 14:52 BST, Babcock’s share price had added 5.80 percent to 850.00p, outperforming the benchmark FTSE 100 index which currently stands 0.06 percent lower at 7,270.97 points. The group’s shares have lost more than 22 percent of their value over the past year, and are down by some 10 percent in the year-to-date.
Babcock announced in a statement today that it was trading in line with expectations and that the outlook for the year was unchanged. The company noted that revenue visibility had improved with 89 percent of revenue now in place for the 2017/18 financial year and around 57 percent for 2018/19.
“The Group continues to maintain a healthy financial position, with growth in line with its expectations for 2017/18,” the engineering services company pointed out.
Babcock further noted that it continued to make progress across all four sectors of its business, and that it had been awarded a number of contracts since the start of the financial year. The company also assured investors that the introduction of accounting standard IFRS15 in 2018/19 was not expected to have a significant impact on earnings, given the nature of the group’s contracts.
Interactive Investor quoted Liberum analyst Joe Brent as noting that Babcock was undervalued.
The FTSE 100 company “should deliver mid-single digit revenue growth in 2018, which makes the business too cheap to ignore,” the analyst pointed out. The comments came as Liberum reiterated its ‘buy’ rating on Babcock. Peel Hunt also continues to see Babcock as a ‘buy’.