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'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