Contract announcements see share price rocket.

Shares in Tyneside engineering group Chieftain shot up yesterday after it announced it was on the verge of clinching two major contracts.

The Newcastle-based company, which specialises in fitting out warships and merchant vessels, cheered investors with news that it was about to secure engineering maintenance contracts with two Teesside companies.

The news comes six weeks after Chieftain, which employs more than 250 staff, issued a profit warning, saying work was coming in slower than expected this year.

Yesterday, Chieftain said in a stock exchange statement: "Chieftain Group plc announces that it is at an advanced stage of discussions with two Teesside-based companies to service their engineering maintenance requirements. If secured, the contracts would have a material impact on results for 2006."

It said a further announcement would be made soon but would not give any indication of timescale.

The company said at the time of the profit warning last month: "Release of work under contracts planned for the remainder of year has been slower than expected and some of this work will now fall into 2006. As a result, some of the revenues and contributions from these contracts will be lower than had been anticipated in 2005. The directors now anticipate that the results for the year ending December 31, 2005, will be below expectations."

The company, which has its main office in Walker, said in October that it was rolling out its industrial applications business to Teesside.

The company's growth plans will be funded by money raised through the Alternative Investment Market, on to which Chieftain moved from the main stock market in the spring. Shares closed up 9.3p to 84.3p last night, a rise of more than 12%.