SHARES in defence giant BAE Systems rose in early trading as Prime Minister Rishi Sunak announced a £4.2 billion contract to build five new Royal Navy warships on the Clyde and the company posted "very strong" sales.
The deal awarded to BAE Systems for the new Type 26 frigates comes on top of three already under construction, including HMS Glasgow, which is set to enter the water for the first time later this year.
The shares rise is underpinned by the firm's stronger sales outlook as countries increase military spending amid the Russian invasion of Ukraine.
The FTSE 100-listed company said that many of the countries it operates in have either announced increases in defence spending, or are making plans to lift spending "to address the elevated threat environment".
Most major defence programmes tend to be long-lasting and involve contracts trading for many years, which means the firm expects to grow in the long-term, it said.
It reported £18 billion in orders secured in the first half of the year, and a further £10 billion since then.
It said it is on track to have a "very strong" year of orders and expects margins to grow into the new year.
Charles Woodburn, Chief Executive, BAE Systems, said: “This contract secures a critical UK industry and allows us to build on our long history of shipbuilding on the Clyde as we continue to deliver cutting-edge equipment to the Royal Navy into the next decade.
"It underpins the ongoing investments we’re making in the skills, infrastructure and technologies needed to stay at the forefront of the maritime sector and to support the UK Government’s National Shipbuilding Strategy.”
Shares in BAE Systems rose 3.5 per cent in early trading.
Wood pays $115 million to settle US legal case
WOOD Group has agreed to pay $115 million (£98m) to settle a legacy lawsuit inherited as part of its acquisition of Amec Foster Wheeler in 2017.
The Aberdeen-based energy services giant had faced legal action from US firm Enterprise Products over alleged cost increases and delays on a cost reimbursable plus fixed fee contract secured in 2013 to engineer, procure and construct a propane dehydrogenation unit in Mont Belvieu, Texas.
Skills gap persists as Scottish business confidence tumbles
ONGOING skills shortages, high energy costs, and rising interest rates have been cited as Scottish business confidence tumbled for the fifth quarter in a row, a key survey has found.
The latest Business Confidence Monitor from the Institute of Chartered Accountants in England and Wales, published today, placed sentiment in Scotland firmly in negative territory in the fourth quarter as the UK stands on the brink of what the Bank of England has warned will be the longest recession since records began.
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