Renold PLC (AIM:RNO) saw its market value jump by 8.25% in early trading after securing a £8.7mln contract from the Royal Australian Navy.
The AIM-listed company said the deal, for the supply of flexible couplings to the Navy’s Hunter class frigates, covers seven years.
The frigates will be built by BAE Systems with the contract representing a significant extension of Renold's collaboration with the FTSE 100-listed group for the supply of these products for naval vessels.
Analysts at City broker Peel Hunt noted that the win “represents a significant extension of the company's collaboration with BAE Systems.”
“These are critical niche products where Renold is a world leader, and is an endorsement of its Torque Transmission strategy. We believe there is the scope to both win and deliver more opportunities in this product area to accelerate the recovery in Torque Transmission,” the analysts said.
Peel Hunt has a ‘buy’ rating on the company.