MARKET REPORT: Rolls-Royce climbs after US Army helicopter deal

Rolls-Royce stock benefited after the US military awarded a major contract for long-range attack helicopters.

The Biden administration selected the Bell V-280 Valor from industrial conglomerate Textron as part of the US Future Long-Range Assault Aircraft (FLRAA) program.

That was good news for Rolls, which makes engines for the Valor.

Rolls shares gained 3.2 percent, or 2.9p, to 93.49p.

The Valor fleet, which has completed more than 200 flight hours, is expected to be rolled out from 2030.

It will be the US military’s newest long-range attack aircraft and will replace the Black Hawk helicopters that have been used for more than 40 years.

With Rolls selected as the premier engine manufacturer, the company is poised to shape the future of US military aviation.

According to analyst Jefferies, the value of the V-280 program to Rolls could reach £4.9 billion in production and £5.7 billion in services if 5,000 engines are delivered.

The broker added that the contract will provide a ‘significant long-term boost’ to the defense division of the engine maker, which accounted for 32 per cent or £3.4 billion of group sales last year.

Textron Chairman and CEO Scott C Donnelly said, “We are honored that the United States military has selected the Bell V-280 Valor as its next-generation attack aircraft.

Stock Watch – ADVFN

ADVFN shares plummeted after it underperformed and went to shareholders for new funds.

The financial data site group said it faced challenges such as increased market volatility.

Sales were down 14 per cent to £7.8m for the year to the end of June, falling short of the £8.7m target.

The group – which appointed Amit Tauman as boss last month – also posted a £1.4m loss, following a £1.6m profit 12 months earlier.

Shares fell 21.1 percent, or 10 pence, to 37.5 pence.

“We intend to honor that trust by building a truly remarkable and transformative weapons system to meet the military’s mission requirements. We are excited to play an important role in the future of military aviation.”

The FTSE 100 fell 0.6 percent, or 46.15 points, to 7521.39 and the FTSE 250 fell 1.2 percent, or 229.5 points, to 19100.08.

The price of oil fell below $80 a barrel for the first time since January on renewed concerns about the outlook for the global economy.

Brent crude fell to a low of $79.36 as investors worried that high inflation and weakening growth would hurt demand for oil.

“A more stubborn inflation outlook raises the prospect of a weaker economy heading into 2023,” said Michael Hewson, chief market analyst at CMC Markets (2.1 percent, or 5 pence, to 233 pence) in the UK. BP fell 1.8 percent, or 8.85p, to 474.65p and Shell fell 0.7 percent, or 17p, to 2358.5p.

Mondi took a hit after Credit Suisse downgraded the packaging company from “underperform” to “outperform” and cut its target price from 1,800 pence to 1,600 pence. Shares fell 4.7 percent, or 73 pence, to 1,468 pence.

AJ Bell suffered a similar fate. The investment platform fell 3.8 percent, or 14.4 pence, to 369 pence after Exane BNP Paribas downgraded its rating from “outperform” to “neutral.” At Phoenix, the insurer has set a target of generating around £1.5bn in new customers by 2025.

The group said it expects around £1.2 billion in business this year, driven by the Standard Life brand. Shares rose 2.6 percent, or 15.2 pence, to 611.4 pence.

Ashtead benefited from rising demand for rental equipment.

The company saw its turnover rise 28 per cent to £2.1 billion in the three months to October. Profits increased by 40 per cent to £541.2 million during that period.

Following the upbeat results, Ashtead — whose shares rose 0.6 percent, or 32 pence, to 5,068 pence — raised its interim dividend by 20 percent and said full-year results should be higher than previous expectations.

There was also good news for one of the UK’s largest providers of mortgages and loans.

Paragon Banking Group added 4.7 percent, or 21.8 pence, to 486.2 pence after hailing adoption of new digital services and cost-cutting measures at the end of an “excellent” fiscal year.

Lending rose 23.6 per cent to £3.21 billion in the year to September. Profits rose 95.6 per cent to £417.9m.