Shares in Babcock (LON:BAB) have jumped in London this morning, with investors reacting positively to news that the group’s nuclear subsidiary has won a 10-year contract to supply Sellafield with specialist handling and containment systems. The deal is worth up to £95 million over the first three years.
As of 09:42 GMT, Babcock’s share price had jumped 3.07 percent to 705.50p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.27 percent higher at 7,510.86 points. The group’s shares have lost over a quarter of their value over the past year, as compared with about a seven-percent rise in the Footsie.
Babcock announced in a statement this morning that its subsidiary Cavendish Nuclear had been awarded a 10-year contract to supply Sellafield with specialist handling and containment systems to process nuclear material. Cavendish Nuclear will use Babcock’s Rosyth Dockyard for the project which will also involve virtual reality simulation. The deal is worth up to £95 million over the first three years.
“We are delighted that Cavendish Nuclear continues to support Sellafield in the delivery of this strategically important programme,” Babcocks’ chief executive Archie Bethel commented in the statement.
Today’s news comes after earlier this month, the support services group said that it did not expect changes related to the introduction of new accounting rules, scheduled to come into force on January 1.
Analysts on Babcock
The 12 analysts offering 12-month price targets for Babcock for the Financial Times have a median target of 937.50p on the shares, with a high estimate of 1,100.00p and a low estimate of 660.00p. As of December 16, the consensus forecast amongst 16 polled investment analysts covering the blue-chip group has it that the company will outperform the market.