MARKET REPORT: Babcock shares fired up to three-year high

Shares in defence group Babcock hit their highest level for more than three years after a bullish update to investors.

In a statement ahead of its AGM, the company said ‘trading has been encouraging’ since the start of the new financial year in April.

The company, which maintains Britain’s fleet of nuclear submarines and is building the Royal Navy’s Type 31 frigates, pointed to ‘good’ revenue growth and ‘improved operational performance’ as well as higher cash flow than a year ago.

‘Babcock International looks well placed to deliver solid profit growth over the medium term,’ said analysts at Peel Hunt.

Shares rose 5.5 per cent, or 21.2p, to 409.6p, the highest level since June 2020.

Boost: Babcock, which maintains Britain’s fleet of nuclear submarines , pointed to ‘good’ revenue growth and ‘improved operational performance’

The rally in the share price, from lows of below 200p in early 2021, is a welcome boost for investors after a decidedly rocky patch.

The company, which also maintains the Challenger 2 tanks provided by the UK to Ukraine, was left reeling five years ago by a damning report from Boatman Capital Research. And despite the recent rally – which has been driven in part by increased defence spending following Russia’s invasion of Ukraine – the shares remain well below their 2014 peak of close to 1300p.

Amid ongoing concerns over the state of the global economy – from high interest rates in the US to a property crisis in China – the FTSE 100 rose 0.1 per cent, or 8.63 points, to 7601.85 while the FTSE 250 lost 0.7 per cent, or 121.55, to 18098.68.

The biggest faller on the mid-cap index was Digital 9 Infrastructure, which invests in everything from underwater fibre cables to data centres. Shares in the company, which is sitting on £1.3billion of debt, slumped 39.5 per cent, or 21.9p, to 33.5p after it clocked up half year losses of £57.4m having made a profit of £27.4m in the same period last year.

HSBC was said to be in talks about acquiring Citigroup’s consumer wealth management business in China, which looks after more than £2.5billion of assets. Shares gained 0.8 per cent, or 5p, to 644.9p.

British life insurer Phoenix Group posted a marginal rise in profits amid a steady demand for its corporate pensions scheme insurance. But shares dropped 7 per cent, or 35.4p, to 472.4p.

It was another good day for investors in Ithaca Energy. Shares rose nearly 9 per cent on Wednesday after the Rosebank oilfield in the North Sea – which it operates with Norway’s Equinor – received the green light. The stock rose another 3.4 per cent, or 6p, to 183.6p yesterday.

But there was some profit-taking at Oxford BioDynamics after an 184 per cent rise in its share price in the past two sessions. The surge came after the company launched its ‘highly accurate’ prostate cancer test in the UK and the US. But after two storming sessions, shares plunged 7.2 per cent, or 2.2p, to 28.5p.

All Bar One owner Mitchells & Butlers is cashing in as customers pop out for drinks and food despite rising prices.

The group, which also owns chains including Toby Carvery and Harvester, posted a 9.7pc rise in sales in its fourth quarter to September 23.

It said cost pressures were ‘abating’ for the firm after a year that has seen hospitality firms hit hard by soaring inflation, supply chain woes and rising staff wages.

Sales growth has also been strong despite the ongoing cost-of-living crisis, with fourth quarter food sales up 11.6pc while drinks were up 6.4 per cent. Shares rose 4.3 per cent, or 9.2p, to 223.8p.

Hydrogen fuel cell maker Ceres Power said half-year losses widened from £22.6m in 2022 to £26.3m this time around. Shares in the firm, which was recently promoted to the FTSE 250 index, slipped 0.8 per cent, or 2.6p, to 326.8p.

This post first appeared on Dailymail.co.uk