Deal of the Year company Hampson Industries has clinched a multi-million project to work on the development of a new executive jet.
The Brierley Hill-based precision engineering group saw its shares gain ground yesterday after announcing it had linked up with US group Advanced Integration Technology (AIT) to work on the design, manufacture and supply of an advanced tooling and assembly line for the new plane, which is believed will be made by Canadian company Bombardier.
Hampson’s shares gained height after yesterday’s announcement plus an upgrade by broker Brewin Dolphin.
The stock rose by seven per cent to 72.75p, valuing the business at £115.21 million.
The company, which recently won The Birmingham Post Deal of the Year Award 2008 for its £158 million acquisition of US companies Odyssey Industries and Global Tooling Systems, is ranked a world leader in close tolerance tooling systems used in aero structures and airframe assembly.
It said the collaboration with AIT is expected to be worth up to $30 million (£18 million) over the next years with initial revenues coming on stream in the current financial year.
No additional capital expenditure is needed to finance the project, which will be carried out by the company’s North American plants.
Hampson finance director Howard Kimberley said the project seemed to signal that the downturn in the business jet sector, which has shrunk by 50 per cent in the last year, has bottomed out.
Texas-based AIT is an industrial automation specialist whose customers include Airbus, Boeing, British Aerospace and Lockheed Martin and has operations throughout the world.
Hampson chief executive Kim Ward said: “This prestigious project will provide significant work share for our tooling businesses, underpinning our confidence in their long term potential.
“The collaboration will harness AIT’s proven capablities in factory design with our own unparalleled expertise in precision tooling design and manufacture.”
Hampson, which has manufacturing sites in the UK, North America and India, has recently invested in new high speed machine tools, Mr Ward said.
“We are confident of securing further new work on both existing and new commercial and military programmes.
“Our recently enlarged capacity means we remain well positioned to continue to support our customers with innovative and high quality tooling solutions.”
Hampson’s deal with AIT was struck against a background of widespread recession within the global aerospace industry.
Brewin Dolphin, which yesterday upgraded its rating of the company’s shares from “reduce” to “hold”, said: “This is positive news at a challenging time for the sector.”
The broker pointed out that the roll out of Boeing’s flagship 787 Dreamliner jet – already two years overdue – has been delayed again. Hampson is supplying some tooling for the new superliner.
About 93 per cent of Hampson’s sales come from aerospace with the balance coming from automotive turbocharger components.
The company’s results for the year to March 31 showed a statutory loss before tax of £15.4 million after acquisition and restructuring costs were taken into account. Underlying profit before tax was 121 per cent up at £37.6 million on revenue 62 per cent ahead at £256.6?million.