Babcock Share Discussion Threads

[ntv] 04/1/2005 21:21

breaking out nicely after a couple of newspaper reports to add to the fire

[penpont] 22/12/2004 23:08

Just had a look at these again and to me they look cheap at current price of 132p. The present consensus forecast on HS (13.3p) looks set to be well beaten given they did 7.7p in H1.

A much more realistic target IMO is that provided by Numis, as quoted in the IC review of results on 3 Dec:

'Numis Securities is raising pre-tax profit forecasts from £30m to £37m, giving EPS of 15p'

That would equate to a PE of 8.8 and with possible earnings of around 17p for the forthcoming year and a forward PE then of, say 12 (sector ave. acc to HS is 13.9).

So, I think your 180 is quite possible jelfsie, and I'd raise that to 200p over 12 months if all goes well.

[arics] 22/12/2004 17:46

My dad says should he sell his 3000 shares at this level?

[ntv] 13/12/2004 21:28

i was hoping for a bit of push above recent high in this bullish mkt
divi on wed
well undervalued

[jelfsie] 06/12/2004 09:19

Dont expect much around Xmas.

[ntv] 05/12/2004 17:15

looks good to me would like to see a positive breakout from here

[jelfsie] 29/11/2004 15:19

Big pull back from 134p, not unexpected. With reference to the historic chart, some bright spark (no doubt with a 1st in mathematics from Oxbridge) has drawn a line with his/her ruler from the 1992 historic high to the recent high and formed an upper trend resistance at 134p. Of course he/she still thinks BAB is an engineering company. Other equally bright sparks have "discovered" an upward sloping triangle formation also with an upper resistance at 134p Yep, they get paid sack loads of dosh to draw straight lines and wiggly ones in the City. It might take time to break the "techies", but sense will prevail and then we will get 180p. All IMHO of course, and looking to add to my long position on weakness.

[ntv] 26/11/2004 21:59

long position today

[jelfsie] 26/11/2004 10:22

Expect a bit of resistance from here (134p) - last 3 year high at 140p was a spike only. Xd 21/01/05 for the interim dividend of 1.35p. Assuming 14p forecast EPS for 2005, and a well covered dividend of 4p (increasing by 10% pa), I expect these to hit 180p eventually, although of course there will be consolidation on the way. IC and Sunday Times have been big fans of BAB since its transition to a Support Services group, so I would expect some further positive comment from them following these results. DYOR as usual.

[swiftnick] 25/11/2004 13:58

Agreed Jelfsie. This is an excellent set of figures.

[jelfsie] 25/11/2004 09:34

Well Im back in this AM at average 125p with a half decent position. I will also add on weakness. Sector is out of favour at present given woes at JRVS but these interims indicate that BAB's management really do know what they are doing. The existing ops are in excellent shape - turnover and operating margins both up. The integration of PHS was my main worry but this appears to be progressing well (cost savings look to be running ahead to those stated at the time of the acquisition). Like all good companies, they clearly fleeced PHS shareholders - at least they will eventually benefit from BAB's performance. Debt at £70M only represents gearing of 40%, interest cover is strong at over 7 times, and annualised OCF of £50M going forward (excluding WC movements) gives them plenty of scope to clear the debt very quickly. Going forward, news on business activity also appears encouraging. Dividend is progressive, and the chart position is also interesting since there is a possible break out taking place - first stop recent highs at 140p.
All IMHO and DYOR as usual.

[liquidkid] 09/11/2004 13:18

The debt could be higher at around £80mn at the interim. Current fy debt £15mn + acquisition payment debt £30mn + PHS debt £43mn less op cashflows circa £10mn.

[jelfsie] 09/11/2004 12:14

Dusting off the BAB file, results due 25/11/04, market forecasts FYE: 2005: Sales £700M, EPS 11.6p, div 3.7p; 2006: Sales 750M, EPS 12.5p, div 3.95p. PHS acquisition will see big jump in debt to circa £60M. BAB forecasts for 2006 before the acquisition were for EPS 14p so BAB's original statement that deal would be earnings enhancing in the year following completion of the acquisition (ie 2006) does not currently hold sway with the market. If the management is right and the market is wrong we should see a nice 20% upside IMHO. 100p - 130p trading range set to continue IMHO, but the key will be revenues, margins, and debts. The NWR settlement has helped the dynamics of the PHS acquisition, but we will probably not know whether it has worked until the finals next year. DYOR as usual.

[sharedoc] 23/8/2004 09:58

any followers, I admit its has'nt got the next wonder drug under development but it looks like a solid stock with growth potential

[sharedoc] 20/8/2004 12:39

massive purchases going through, godd director support today. this must head back to 120p

[liquidkid] 18/8/2004 09:08

Getting the Network Rail maintenance and operation contracts earlier this month can't have helped sentiment after what happened to Jarvis running them - it is like a Judas kiss. Although BAB get paid part of £30mn for two years using brand new eqipment.

The average broker recomendation for 2005 revenue is £720mn yet the CEO has said:
"The turnover of the new group on an on-going basis will be some £750 million per annum with a better spread of business risk. We are well positioned for future growth."

Some up to date research needs to be published on this company.

[spooky] 03/8/2004 15:42

I am a little surprised to see these back at these levels,i have started buying with a 100p closing stop.My feeling is that PET shareholders selling in the mid-summer lull has created a medium term opportunity.

[jelfsie] 20/5/2004 10:55

Well those results were excellent, but clearly growth from here, in the absence of any developments on the two big MOD contracts in the pipeline, will be hard. You can see the attraction of the PET acquisition now. I believe that short term the BAB share price will remain depressed (PET shareholders selling / execution risks / uncertainty as to whether the bid will proceed etc. Long term BAB shares look attractive IMHO. DYOR.

[bigbobjoylove] 21/4/2004 14:55

falling off a shelf these,glad i sold me phs last week.see 70p here

[spooky] 21/4/2004 13:51

105p seems sensible to me with a close below £1 as a stop.

[jelfsie] 21/4/2004 10:17

Recent slide is on low volume, but not surprising. The combined group will have some cost savings, and BAB are not overpaying. 2005 forecasts are likely to now be static at around 10.7p for BAB due to share dillution but P/E of 10 is cheap IMHO. Cant see it breaking 100p. I'm in again at 105p if anyone wants to sell me some shares.

[bigbobjoylove] 08/4/2004 19:42

LOOKS LIKE U GUYS WILL HAVE 2 STUMP UP MORE CASH 4 PHS,LOOKS AS IF MBO READY 2 B ANNOUNCED.

[rbennett] 23/3/2004 21:59

bggcl to be fair i don't think they will be sucessful in their bid, my betting is a management buy out