Healey's war chest
XLI•British finance minister John Healey is due to deliver his first budget on Wednesday, with defence spending near the top of his agenda. Jefferies says Babcock and QinetiQ each generate around 60% of their revenue from the Ministry of Defence.
1. Defence spending plans
New Prime Minister Andy Burnham said Healey will set out a plan to fully fund the government's existing defence commitments and a pathway to meeting its 2035 NATO spending pledge. Healey previously resigned as defence secretary, saying the Treasury was unwilling to commit resources needed to defend the country as threats rose.
2. Contractor exposure
Jefferies says Babcock and QinetiQ are most exposed to Ministry of Defence spending, with each generating around 60% of revenue from the department. The broker also describes Cohort as meaningfully leveraged to defence spending.
