May 13, 2009 / 6:46 AM / 11 years ago

VT Group year profit beat forecasts

LONDON (Reuters) - British defence and support services company VT Group VTG.L beat forecasts with a 41 percent rise in underlying full-year profit, and said it continued to target acquisition opportunities next year.

VT, which said in January it would exit its shipbuilding business nearly 150 years after launching its first boat on the river Thames, said underlying pretax profit rose to 86.6 million pounds in the year to end-March.

The consensus profit forecast was 78 million pounds.

The dividend was raised 10 percent to 14.4 pence.

“VT have delivered a strong set of results ahead of expectations, backed with strong cash generation and a dividend marginally ahead of our forecasts,” Panmure analyst Mike Allen said in a note.

VT shares, which hit a 40-month low at 412.75 pence on Monday, were up 4.7 percent at 470.75 pence by 9:20 a.m., valuing the business at 842 million pounds.

Chief executive Paul Lester said he still wanted to use cash from the shipbuilding divestment for an acquisition spree once the deal completes in the autumn.

VT, which had an option, agreed to sell the division to BAE Systems (BAES.L) for 380 million pounds.

“In the latter half of this year and into next there should be opportunities to buy good businesses at decent prices,” Lester said.

He said VT was confident it would continue to win orders from the defence departments of both Britain and the United States despite current budget constraints.

“The U.S. and UK will be under pressure to outsource to get costs down,” he said. VT currently has both training and military equipment upgrade contracts.

(Reporting by John Bowker; Editing by Rupert Winchester and Dan Lalor)

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