Babcock returns fire after mystery critic’s diatribe
DEFENCE giant Babcock came under fire for a second time from the mysterious research firm Boatman Capital.
The engineering company, which has worked on all the UK’s nuclear submarines, hit back at a ‘malicious attack’ from the anonymous website which it branded ‘inaccurate and misleading’.
Boatman published its latest report on Babcock yesterday, claiming that the defence firm needed to write down by £50m the value of Defence Support Group (DSG), an acquisition that repairs and maintains British Army vehicles. A writedown of this size would be equivalent to 12.8pc of Babcock’s pre-tax profits.
DSG is ‘overvalued’, Boatman claimed, alleging Babcock’s structure was opaque and ‘needlessly complex’. Babcock disputed this, and said DSG was performing to financial expectations. Investors seemed inclined to side with the British firm, as shares edged up 0.7pc, or 3.4p, to 522.4p.
Weapons firm Cobham was also in shareholders’ good books, as it revealed it had settled a long-running tax dispute and will pay £69m to the UK authorities. Shares climbed 0.6pc, or 0.65p, to 114.3p.
Though heroin addiction treatment firm Indivior has faced a slew of challengers recently, its management still backs it. Chief executive Shaun Thaxter bought £44,641 worth of shares on Tuesday, while directors Tatjana May and Daniel Phelan bought £9,945 and £21,645 worth respectively.
Their display of confidence came as a welcome assurance for investors, as shares climbed 16.6pc, or 7.51p, to 52.76p.
Indivior has been struggling in recent months, after losing a court case against a competitor which was producing cheaper generic versions of its drugs, and was recently accused of fraud by the US Department of Justice, which it denies. Thaxter, who now owns more than 1.6m Indivior shares worth £812,000, could gain significantly if its headache goes away.
‘Brilliantly boring’ may not be a compliment most people would welcome, but it was music to the ears of investors in catering company Compass Group which served up an 8.8pc revenue rise to £12.3bn for the six months to the end of March.
Profit was up 6.9pc to £913m, and the interim dividend climbed 6.5pc to 13.1p. Nicholas Hyett, an analyst at Hargreaves Lansdown, said: ‘ Compass is a brilliantly boring business, but that’s key to its charm.’ Shares climbed 2.9pc, or 50p, to 1778.5p.
Bookie William Hill tried to deflect shareholder attention away from a 7pc slide in its retail revenues as it hailed success in the US. The gambling company’s UK retail business has suffered after the Government cut the maximum stake customers can place on fixed-odds betting terminals from £100 to £2.
Its acquisition of Swedish rival Mr Green boosted online revenues by 8pc, but the real positive for investors was a 48pc rise in revenue from the US. It is just one year since the country repealed a ban on sports betting, which cracked the market open to British stalwarts such as William Hill. But shares were still down by 2.6pc, or 3.65p, at 134.65p.
Housebuilder Crest Nicholson edged up 1pc, or 3.6p, to 369.6p as it said it was still prioritising returning money to shareholders over fuelling growth. Investment platform Hargreaves
Lansdown was up 1.6pc, or 36p, at 2343p after it pulled in £2.9bn of new business in the first four months of the year. It now looks after a record £97.8bn.
Credit score and consumer data company Experian saw full-year revenue rise 6pc to £3.8bn, and profit climb 1pc to £743.6m. Shares edged up 1.4pc, or 30p, to 2239p.