British firm VT Group Plc posted a 21 percent rise in 2006 profits on Tuesday and revealed details of a pending shipbuilding joint venture with BAE Systems (BA.L: Quote, Profile, Research, sending its shares sharply higher.
"It is envisaged that the JV would be owned 45 percent by VT and 55 percent by BAE Systems, with equal board representation and voting rights," the shipbuilding and support services firm said in a statement.
VT said it also expected to benefit from rights governing its potential exit after three years, with a minimum guaranteed floor price.
The deal requires final agreement between the companies and the Ministry of Defence and approval from VT shareholders.
VT shares were up 6.1 percent at 553-1/2 pence in morning trading versus London's Mid 250 Index (.FTMC: Quote, Profile, Research, up 0.2 percent. Underlying profit before taxation for the year ended March 31 rose to 74.2 million pounds ($146.9 million) from 61.5 million a year earlier.
At VT Support Services, the largest unit, revenues jumped 55 percent, though its operating margin slipped to 10.1 percent from 11.4.
At VT Shipbuilding, which accounted for just 16 percent of overall revenues, the margin rose to 8 from 7 percent.
The margin at VT Education & Skills fell to 3.4 percent from 5.1 percent reflecting bid costs and restructuring, which held back operating profit, the company said.
Margins at the smallest unit, VT Communications, rose to 15.8 percent from 15.1, helped by the start of a contract with Deutsche Welle. Overall revenues topped 1 billion pounds for the first time, rising 19 percent to 1.005 billion. VT proposed a final dividend of 8.6 pence, up 11 percent. BAE and VT, Britain's two biggest shipbuilders, already share a trio of joint ventures.
VT said it would buy out BAE's 50 percent stake in one of their joint ventures, Flagship Training Ltd.
VT Group Finance Director Chris Cundy told Reuters in a telephone interview that another of their 50-50 tie-ups, repair and maintenance firm Fleet Support Ltd., would be folded into the wider shipbuilding JV that they are discussing.
"It is envisaged that the JV would be owned 45 percent by VT and 55 percent by BAE Systems, with equal board representation and voting rights," the shipbuilding and support services firm said in a statement.
VT said it also expected to benefit from rights governing its potential exit after three years, with a minimum guaranteed floor price.
The deal requires final agreement between the companies and the Ministry of Defence and approval from VT shareholders.
VT shares were up 6.1 percent at 553-1/2 pence in morning trading versus London's Mid 250 Index (.FTMC: Quote, Profile, Research, up 0.2 percent. Underlying profit before taxation for the year ended March 31 rose to 74.2 million pounds ($146.9 million) from 61.5 million a year earlier.
At VT Support Services, the largest unit, revenues jumped 55 percent, though its operating margin slipped to 10.1 percent from 11.4.
At VT Shipbuilding, which accounted for just 16 percent of overall revenues, the margin rose to 8 from 7 percent.
The margin at VT Education & Skills fell to 3.4 percent from 5.1 percent reflecting bid costs and restructuring, which held back operating profit, the company said.
Margins at the smallest unit, VT Communications, rose to 15.8 percent from 15.1, helped by the start of a contract with Deutsche Welle. Overall revenues topped 1 billion pounds for the first time, rising 19 percent to 1.005 billion. VT proposed a final dividend of 8.6 pence, up 11 percent. BAE and VT, Britain's two biggest shipbuilders, already share a trio of joint ventures.
VT said it would buy out BAE's 50 percent stake in one of their joint ventures, Flagship Training Ltd.
VT Group Finance Director Chris Cundy told Reuters in a telephone interview that another of their 50-50 tie-ups, repair and maintenance firm Fleet Support Ltd., would be folded into the wider shipbuilding JV that they are discussing.