VT Group to seize outsourcing opportunities

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Symbol	Price	Change
BA.L	376.00	-0.40
VTG.L	672.00	-2.50

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LONDON (ShareCast) - Support services firm VT Group (LSE: VTG.L - news) posted a sharp rise in profits and revenues in the year to September 30 and said it looks forward to benefiting from increased outsourcing opportunities as the government seeks to cope with squeezed budgets.

VT Group, which recently disposed of its shipbuilding business to become a pure support services company, said pre-tax profits climbed to £32.8m from £21.5m as revenue rose to £574.1m from £456.5bn. VT will pay an interim dividend of 4.3p a share, compared with 3.9p the previous year.

VT sold its stake in a shipbuilding business to defence group BAE Systems (LSE: BA.L - news) at the end of October for about £346m and intends to use the funds to buy support service businesses. The firm is interested in areas such as local government and waste-to-energy conversion.

Among outsourcing activities it expects to be in involved in as the government looks to save cash are helping extend the life of military equipment so the government does not have to replace it. It points out that only £80bn of £620bn UK public expenditure is outsourced.