A warning on revenue expectations in July this year hurt sentiment towards outsourcer Babcock (BAB), and pushed the shares below the level we tipped them at the start of the year. Spending delays on UK defence programmes hit Babcock's marine and land divisions, which between them accounted for 76 per cent of last year's revenue.
IC TIP:
Buy
at
707p
Clearly, investors had expected things to worsen, as the group prompted a share price fillip by reiterating its forecast of low single-digit revenue growth. Babcock has also carried out some disposals of non-core operations in North American mining and construction support, as well as media services.
