Sales hit £2.9bn at GKN
Sales have increased 11 per cent at Redditch-based GKN, the company said this morning. Despite its driveline division taking a £12m hit from the Japanese earthquake in March, sales rose to £2.9bn for the last six months. Sir Kevin Smith, chief executive of the engineering company, said the board was to pay a dividend of 2 pence per share on the back of the "strong" performance.
Sales increased £287m over the six months to 30 June 2011 compared to the same period in 2010.
GKN secured a trading profit of £247m, up £45m on its 2010 figures. However, this sum does not include the £23m one-off charge relating to the temporary closure at the Hoeganaes plant in Gallatin, US, which GKN reported earlier this year.
Driveline sales were up 12 per cent, said GKN, with a 7.1 per cent trading margin. The division took a £12m profit impact from the Japanese earthquake in March this year.
Powder metallurgy sales rose 15 per cent, while underlying sales in the aerospace division lay "broadly flat", said the company.
Land Systems sales increased 24 per cent over the six months.
Smith said: "The first half trading environment has seen strong market outperformance for GKN's driveline, powder metallurgy and land systems businesses. The aerospace market has remained subdued although civil aerospace is now moving into a strong growth phase with volume increases on existing platforms and new aircraft moving into production."
He added the company would pay an interim dividend of 2 pence per share on the back of its performance.
During the period, GKN secured about $2.8bn of contract extensions, new programme wins and work scope expansions in aerospace.
The company reported positive free cash flow of £25m, compared with £107m the year previously. Net debt also rose from £151m in 2010 to £174m in these latest results.
In the last month, GKN announced two major acquisitions, which were not included in the interim results.
It will purchase Germany-based Stromag, which produces industrial power management components and Getrag's Driveline Products Business, through which it hopes to create the leading global supplier of AWD driveline products.
Smith said: "GKN has continued to make strong progress both in terms of financial performance and in building the future of our global market-leading businesses.
"We are also pleased to further strengthen our Driveline and Land Systems businesses with two highly complementary acquisitions in Stromag and Getrag Driveline Products.
"GKN's excellent global market positions, strong order books and leading technology leave us extremely well positioned for sustainable growth and further margin expansion."
