Strong Q1 demand in aerospace and automotive sectors benefits GKN
STRONG demand within global aerospace and automotive sectors has continued to benefit Midlands engineering group GKN.
In a trading update covering the period since January 1, the Redditch-based group said demand across its principal markets had been consistent with its expectations.
“The commercial aerospace market remains strong while military aerospace demand is declining. Global light vehicle production was up nearly 5% with good growth in Japan, China, North America and Europe while markets in India and Brazil declined. Construction and industrial markets were broadly flat while demand for agricultural equipment fell,” it said.
Against this backdrop, the group said it continued to make good progress with sales for the three months ended March 31, 2014 reaching £1,915m, a 7% organic increase which was offset by 6% adverse currency translation, due to sterling’s strength against most major currencies.
Trading profit increased 19% to £166m. Organic trading profit increased by £35m, helped by the absence of £23m of restructuring in 2013, while it said the adverse currency translation impact was £9m. Trading margin was 8.7% (2013: 7.4%, or 8.6% excluding the £23m restructuring charges).
Pre-tax profit rose 22% to £145m (2013: £119m), while net debt at March 31, 2014 was £785m (December 31, 2013: £732m), reflecting normal seasonality.
Nigel Stein, GKN chief executive, said: “We have delivered a strong performance in the first quarter despite adverse currency translation impacting the reported sterling results. Looking forward to the rest of the year, tougher prior year comparators mean that organic growth is likely to be more modest. However, our market leading positions, advanced technology and extensive global footprint should make 2014 another year of progress.”
