Defence spending boom fires up Babcock shares
A SERIES of contract wins helped Babcock rise to the top of the stock market’s second tier.
The defence group was the FTSE 250’s highest riser yesterday, surging 6.6pc, or 19.2p, to 309.2p as it looked to cash in on governments bolstering national security spending amid the war in Ukraine.
Babcock, which counts the Ministry of Defence (MoD) as its largest customer, landed contracts with the Polish and Australian defence forces, alongside a sixyear deal with the Royal Navy’s warships. The group also won 20 contracts across its energy and marine business.
Revenues at Babcock inched up 1pc to £2.14bn in the six months to September.
Boss David Lockwood said: ‘We are operating in a macro economic and geopolitical environment that remains volatile.
‘We are focused on effectively addressing the challenges our business faces, most notably inflationary pressures, whilst also ensuring we maximise the increased opportunity set we are seeing in a market backdrop that is supportive for defence.’
But the FTSE 250 did not feel the benefit from Babcock’s boost, edging up only 0.05pc, or 9.02 points, to 19,422.37.
The FTSE 100, meanwhile, rose 1.03pc, or 75.99 points, to 7452.84.
Oil stocks bounced back a day after the price of crude hit a tenmonth low.
The slump came amid reports that Saudi Arabia and other Opec producers could hike output.
But the body has since rebuffed claims it was looking at boosting oil production.
With crude back on the rise, BP climbed 6.5pc, or 29.85p, to 488p,
Shell rose 4.8pc, or 110p, to 2382.5p and North Sea producer Harbour Energy added 7.1pc, or 21.1p, to 320.6p.
Investors in Petrofac dumped their shares after the oil rig builder said chief executive Sami Iskander will leave at the end of March next year.
He will be replaced by Tareq Kawash, a senior executive at energy firm McDermott.
Shares crumbled 10.7pc, or 12.7p, to 106p.
Building materials group CRH enjoyed a surge in sales and profit despite problems at its European business. Sales rose 13pc to £20.56bn in the three months to September while profit was up 14pc to £3.54bn.
A strong performance in CRH’s Americas materials division was in stark contrast to its European business, where sales were down 9pc and profit fell 19pc.
This came as the soaring cost of energy and raw materials across Western Europe outpaced the company’s price increases. Shares slid 1.3pc, or 44.5p, to 3300p. Revenues
at pork specialist Cranswick rose 12pc to £1.1bn in six months to September despite a ‘relentlessly challenging operating environment’. Shares gained 4pc, or 122p, to 3208p.
Telecom Plus said its business is ‘growing faster than ever’ as it raked in new customers looking to make savings on energy bills.
Revenue at the utility services provider rocketed 51.5pc to £562.4m in the six months to September while profit jumped 46.2pc to £29.1m.
Telecom Plus hiked its profit forecast for the year, saying it should be at least £95m, following the positive set of results. Shares rose 0.4pc, or 10p, to 2345p.
Profit at water supplier Severn Trent increased 2.4pc to £261.7m in the six months to September.
Inflation-linked rises in water tariffs also helped its turnover increase 10.8pc to £1.1bn.
But Severn Trent faced soaring energy prices, with its power costs jumping 75.3pc to £41.1m in the six months to September. Shares fell 0.7pc, or 19p, to 2739p.