Brokers certainly like the stock and trading on a forward P/E of just over 9 going into 2010, far too cheap imho.

Babcock International Group PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Arden Partners
12-03-09 BUY 119.00 41.10 13.50 143.00 49.40 15.50

KBC Peel Hunt Ltd
10-03-09 HOLD 118.36 40.40 13.50 140.73 45.24 15.50

Singer Capital Markets Ltd
09-03-09 BUY 120.10 40.50 14.00 144.40 46.90 15.50

Teathers
04-03-09 BUY 120.51 40.33 13.40 146.94 46.96 15.00

ABN AMRO
10-02-09 HOLD 122.90 39.77 12.50 138.90 44.42 15.00

Numis Securities Ltd
21-01-09 ADD 119.80 41.10 13.00 145.40 48.70 14.10

NCB Stockbrokers Ltd
08-01-09 ACCU 41.25 12.45 46.74 14.37

2009 2010
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)
Consensus 119.56 40.68 13.37 144.16 47.29 15.37

1 Month Change 0.19 0.09 0.02 0.01 0.45 0.03
3 Month Change 0.49 -0.04 0.09 -0.07 -0.46 0.19


GROWTH
2008 (A) 2009 (E) 2010 (E)

Norm. EPS 36.83% 44.23% 16.25%
DPS 34.59% 49.38% 14.96%

INVESTMENT RATIOS
2008 (A) 2009 (E) 2010 (E)

EBITDA 135.90m 172.74m 194.28m

EBIT 105.00m 142.06m 162.84m

Dividend Yield 1.97% 2.94% 3.38%

Dividend Cover 3.15x 3.04x 3.08x

PER 16.13x 11.18x 9.62x

PEG 0.44f 0.25f 0.59f

Net Asset Value PS -80.79p 168.28p 185.86p

StockMarketWire.com
Babcock International Group is on track to deliver its expectations of growth at both the half and full year periods, shareholders at the annual general meeting today will be told.

the group says it continues to experience strong demand for the critical services it provides to customers through existing contracts, and business development remains active in its key markets.

Since the full year results announcement on 18 May, the order book has remained stable at £20 billion and continues to provide excellent visibility, with 84% of revenue for 2015/16 and 60% of revenue for 2016/17 already in place. The bid pipeline has also remained stable at around £10.5 billion, and the tracking pipeline continues to provide significant longer-term opportunities for growth.

StockMarketWire.com
Babcock reports continued strong growth in the six months to the end of September with excellent visibility of future revenues.

Total revenue for the first half increased by 12% to £2,349.2 million (2014: £2,103.2 million), equating to 10% organic growth at constant exchange rates. The largest contributor to this growth was the Support Services division which reported a 30% increase in revenue, benefiting from increased activity on long term decommissioning projects in its subsidiary, Cavendish Nuclear. The Marine and Technology division delivered another strong performance in the period, with growth of 11% driven by an increase of activity across all its markets.

This more than offset the expected first half reduction of 3% in the Defence and Security division, due to programme phasing within the AirTanker joint venture and the ending of the Prime contracts in January 2015, and the headwinds from weaknesses in oil and commodity prices affecting parts of the International division. Total underlying operating profit for the group increased by 6% to £253.0 million in the first half (2014: £239.5 million), equating to 8% organic growth at constant exchange rates. As previously guided, the increase was at a lower rate than revenue mainly as a result of the early stages of the long-term Magnox and Dounreay decommissioning projects. This provided an overall Group operating margin of 10.8% (2014: 11.4%). Total net finance costs reduced to £39.4 million (2014: £52.5 million), reflecting the refinancing of the Group following the acquisition of Avincis (now MCS) and the halving of retirement benefit interest to £2.6 million (2014: £5.5 million). Total profit before tax increased by 14% to £213.6 million (2014: £187.0 million). Taxation charges, including the Group's share of joint venture tax, were £36.3 million (2014: £33.7 million) representing an effective underlying tax rate of 17% (2014: 18%). The group said that sterling strengthened significantly against the main trading currencies of the Group compared to the first half of 2014/15, but stabilised in the second half of last financial year. However following the half year end, sterling has strengthened further. A 10% increase in the euro affects revenue by around £31.0 million and operating profit by £6.0 million. A 10% movement in the rand affects revenue by around £27.0 million and operating profit by £2.4 million.

Chief executive Peter Rogers said: "Babcock has maintained its record of strong growth in revenue, profit and earnings with continued robust cash generation and conversion. Our sector leadership positions, excellent track record and operational scale enable us to continue to capitalise on healthy levels of demand in established and new markets, in Britain and overseas. "Our order book remains at a record level and gives us excellent visibility of future revenues, whilst our replenished bid pipeline provides further opportunities for long-term growth. The Board therefore remains confident that we will continue to make good progress and that our full year results will be in line with our expectations."

StockMarketWire.com
Babcock International's underlying pre-tax profits rose by 4.9% to £239.5m in the six months to the end of September.

Underlying revenues were up 5.9% at £2,638.9m.

On a statutory basis, pre-tax profits were up 11.3% at £181.9m and revenues rose by 6.6% to £2,316.7m.

The order book stood at £18.5bn - down 7.5% - while the bid pipeline rose by 13.0% to £12.2bn.

The board declared a dividend of 6.85p per share - up 5.4%.

Chief executive Archie Bethel said: 'Babcock made good progress during the first half, building on our leadership position in the engineering services market.

'We increased revenue, profit and earnings with underlying organic revenue growth at constant exchange rates of 5%, and are maintaining our track record of increasing returns to shareholders by again raising our interim dividend.

'We completed our sector realignment, successfully establishing the springboard for our next phase of development. Our competitive strength is reflected in our double-digit margin, our continued strong win rates and the increase in our combined order book and pipeline to £31 billion. 'The increasing number and value of our opportunities both in the UK and internationally, where we continue to gain traction, highlights Babcock's long-proven ability to grow despite uncertain market conditions.

'Our focus on technology-intensive critical services where barriers to entry are high has consistently enabled us to generate sustainable growth regardless of any decline in spending on original equipment.

'I expect this to remain a key element of differentiation for Babcock in the coming months and years.

'We have excellent revenue visibility with 92% of budgeted revenue now in place for FY18, and we expect a slight improvement in overall group margin during the second half.

'We therefore remain confident that full year results will be in line with our expectations and that we will make further good progress beyond this year.'

Down 10% on quarterly update.

http://www.moneyam.com/action/news/showArticle?id=6058059