LONDON BRIEFING: Babcock launches buyback; Intertek backs EQT bid

Wed, 13th May 2026 07:58

(Alliance News) - Babcock reports higher annual revenue and launches a GBP200 million share buyback despite a hit from its Type 31 frigate programme, while Intertek says it is "minded" to accept a takeover proposal from EQT. Elsewhere, Vistry pauses its share buyback programme as it prioritises debt reduction amid more volatile market conditions.

Here is what you need to know before the London market open:

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MARKETS

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FTSE 100: called higher 0.5% at 10,318.92

GBP: higher at USD1.3534 (USD1.3505 at previous London equities close)

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BROKER RATINGS

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Jefferies raises IMI price target to 3,295 (3,085) pence - 'buy'

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Peel Hunt starts Helios Towers with 'buy' - price target 290 pence

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Deutsche Bank Research cuts On The Beach Group price target to 314 (345) pence - 'buy'

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COMPANIES - FTSE 100

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Intertek Group says its board would be minded to recommend a GBP60.00-per-share cash takeover proposal from EQT, subject to agreement on final terms and completion of due diligence. The proposal, which also allows shareholders to retain a 107.7p final dividend, follows earlier rejected bids of GBP51.50, GBP54.00 and GBP58.00 per share. The London-based assurance, inspection, product testing and certification firm says it remains confident in its standalone strategy but has paused its strategic review while EQT conducts confirmatory due diligence. The deadline for EQT to announce a firm offer or walk away has been extended to June 11.

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Babcock International says revenue in the financial year ending March 31 rises 9.1% to GBP5.27 billion from GBP4.83 billion a year earlier, driven by growth in its Nuclear and Aviation businesses. Underlying operating profit falls to GBP293 million from GBP363 million and underlying basic earnings per share declines to 39.6p from 50.3p, reflecting a GBP140 million non-recurring charge related to its Type 31 frigate contract. Excluding the charge, underlying operating profit rises 19% to GBP433 million and operating margin improves to 8.2% from 7.5%. The London-based aerospace, defence and nuclear engineering group says free cash flow increases to GBP262 million from GBP153 million and net debt narrows to GBP329 million from GBP373 million. Land revenue returns to growth in the second half, but declines 3% overall to GBP1.08 billion from GBP1.12 billion, as growth in defence is offset by weaker civil volumes in Rail and South Africa. The company announces a new GBP200 million share buyback programme after completing a previous GBP200 million buyback in April. Babcock reiterates unchanged expectations for financial 2027, supported by around 70% of expected revenue already under contract.

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Spirax Group says trading in the first four months of 2026 is in line with expectations and reiterates its full-year guidance despite elevated macroeconomic uncertainty and higher energy costs linked to conflict in the Middle East. The London-based property developer reports mid-single-digit organic revenue growth in the four months ended April 30 and says adjusted operating profit margin improved organically from a year earlier. Spirax says demand in its Steam Thermal Solutions business grew ahead of industrial production, supported by strength in maintenance, repair and operations activity and some recovery in large projects, while Electric Thermal Solutions delivered double-digit demand growth across all divisions. The company says net borrowings at the end of the first quarter were GBP575 million, with net debt to Ebitda unchanged at 1.5x.

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Oil major BP confirms it has entered a production sharing agreement for six blocks in the North Ustyurt region of Uzbekistan, marking its first project in the country. BP acquires a 40% participating interest in the PSA, taking 20% each from SOCAR and Uzbekneftegaz. Following the deal, BP will hold 40%, while SOCAR and Uzbekneftegaz will each own 30%, with SOCAR remaining operator. The agreement covers the Boyterak, Terengquduq, Birqori, Kharoy, Qoraqalpoq and Qulboy blocks. The project is currently in its first phase, with seismic activities under way. BP says the PSA was originally signed in July 2025 between SOCAR, Uzbekneftegaz and the Ministry of Energy of Uzbekistan.

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COMPANIES - FTSE 250

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Vistry Group pauses its share buyback programme to prioritise debt reduction as the Kent, England-based housebuilder says it focuses on improving cash generation amid "more challenging" market conditions. Vistry says average daily net debt in the first half is expected to be higher than a year ago due to higher land payments and slower conversion of reservations into completions, though it still expects to end 2026 with net cash above GBP100 million. The company says year-to-date sales rate rises 32% to 1.20 from 0.91 a year earlier, with Open Market sales around 30% higher year-on-year despite recent moderation caused by uncertainty linked to the Middle East conflict. Vistry says increased incentives and discounting have been concentrated on low-margin and near-complete sites, with the impact on profit expected to ease in the second half. The forward order book slips to GBP4.5 billion from GBP4.6 billion, while partner transaction activity remains subdued during the transition between Social Affordable Housing Programmes, or SAHP. Vistry says the Middle East conflict is putting upward pressure on material and labour costs, which it is seeking to mitigate through supplier engagement. The company says it is adopting stricter hurdles for land buying while conditions remain volatile and expects adjusted pretax profit for 2026 towards the middle of the GBP168 million to GBP283 million analyst forecast range.

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CVS Group is facing pressure from activist investor Converium Capital, which has built a 2% stake and is urging the company to launch a GBP100 million share buyback, according to the Financial Times. Converium says CVS shares remain undervalued despite the conclusion of the UK competition regulator's investigation into the veterinary sector and the company's recent promotion to the FTSE 250 index. The activist investor argues the buyback would still leave room for up to GBP45 million of acquisitions while remaining within debt targets. Converium also warns it could seek board representation if its demands are not met. The UK Competition & Markets Authority in March imposed reforms on major veterinary groups, including CVS, following a probe into competition and pricing in the sector.

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TP ICAP says first-quarter revenue rises 13% year-on-year at constant currency to a record GBP689 million, driven by strong performances in its Global Broking and Energy & Commodities divisions amid volatile market conditions and elevated trading volumes. Global Broking revenue increases 15%, while Energy & Commodities revenue rises 13%. The company says Liquidnet revenue grows 9%, helped by expansion in equities and multi-asset execution, while Parameta Solutions revenue increases 4%. TP ICAP says the record first quarter marks a "very strong start" to the year and says it remains comfortable with its outlook for the remainder of 2026 at current foreign exchange rates.

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Gamma Communications says trading in the opening months of financial 2026 is in line with expectations, supported by continued growth in cloud communications and healthy cash generation. The company says net debt narrows to GBP1.6 million at April 30 from GBP9.3 million at December 31, despite share buyback and acquisition-related payments. Gamma reiterates full-year guidance and expects adjusted Ebitda within the analyst consensus range of GBP138.1 million to GBP142.8 million, with fully diluted adjusted earnings per share expected between 90.9p and 94.4p. Separately, Gamma confirms that Providence Equity Partners LLC is among parties in preliminary takeover discussions following recent press speculation, though it says there can be no certainty that an offer will be made.

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OTHER COMPANIES

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Guardian Metal Resources says it has expanded its Tempiute Tungsten project mineral rights position in Nevada by more than 375% after identifying around 550 acres of historical tungsten-enriched mine tailings. The company says it has staked 193 additional claims to secure the full extent of the tailings area and is evaluating the potential to recover tungsten and other metals from the site as a near-term domestic US supply opportunity. Guardian Metal plans to begin an auger drilling programme in June, subject to permits, to assess the volume and grade of material. Separately, the company says key pre-feasibility study workstreams at its Pilot Mountain project in Nevada are advancing well, supported by a USD6.2 million investment from the US government.

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The National Investment Fund of the Republic of Uzbekistan JSC says its initial public offering raises around USD603.6 million, valuing the company at about USD1.95 billion. The fund says it sells a 31% stake through shares and global depositary receipts, with strong demand from international and local investors. Cornerstone investors including BlackRock, Franklin Resources and Redwheel commit USD300 million. Conditional trading in the GDRs on the London Stock Exchange begins on Wednesday under the symbols UZNF and UZ20, with unconditional trading expected from next week Monday. In Tashkent, its ordinary shares begin trading on or around next week Monday.

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By Eva Castanedo, Alliance News reporter

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