Babcock to benefit from budget cuts
DEFENCE services group Babcock International Group yesterday said it had started the 2010/11 fiscal year well and expected outsourcing opportunities to increase as Britain looks to cut its budget deficit.
Babcock, which maintains Royal Navy submarines, said it had a healthy bid pipeline and its order book had remained stable at £8.3bn.
“As the government seeks to address the fiscal deficit in the UK, we believe there will be an increase in outsourcing opportunities in our chosen markets,” the group said in a statement yesterday.
Babcock, close to completing a takeover of rival VT Group, said it had begun work with VT’s management team “in planning a speedy and efficient integration process”.
“We believe our major markets remain attractive with significant long-term growth opportunities in both the UK and overseas and that these opportunities are considerably enhanced by the increased scale and capabilities we expect the acquisition of VT to bring to the group,” it added.
Babcock said that its proposed acquisition of VT has received all the necessary competition and regulatory clearances, in both the UK and US.
Shares in Babcock closed yesterday at 62p, valuing the business at around £1.5bn.