Submarine contractor Babcock is one of the best-placed companies to enable key services to be maintained at a lower cost says F&C head of UK equities Peter Lees.
“Cuts could ‘wreck’ defence sector” reads a BBC headline. “Defence cuts are draconian” reports the Guardian. The figures themselves are startling. The National Audit office has reported a £36bn budget deficit over the next 10 years. Those close to the Ministry of Defence believe this is likely to be a conservative estimate, so it is no surprise in advance of the looming October budget, Babcock, with its exposure to MoD spending, has fallen out of favour. Nevertheless, we think it is worth looking past the headlines. Babcock has a very strong submarine business through its Devonport...
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