Manufacturing fightback continues as GKN sees profits rise 15%
ENGINEERING group GKN has announced a 13% increase in sales with pre-tax profit rising 15% based on strong demand.
The Redditch-based group said revenue rose £683m to £6.1bn in the year ending December 2011, an underlying increase of 10%. Pre-tax profit was £417m (2010: £363m), with reported pre-tax profit coming in at £351m (2010: £345m).
Trading profit was £487m, up £76m, an increase of 18%, while group trading margin of 8% was up from 7.6%. The group has now issued increased targets for its three main divisions.
Earnings per share were up 9% to 22.6p (2010: 20.7p) and a final dividend of 4p will be paid, giving a total for 2011 of 6p per share (2010: 5p per share), a 20% increase.
Nigel Stein, CEO, said: “2011 was a year of good growth. GKN achieved a strong financial performance with all four divisions at or near record profits. Each division has leading technology and market positions and out-performed their respective markets, with a strong pipeline of new business. GKN Driveline and GKN Land Systems were further strengthened with the two highly complementary acquisitions of Getrag Driveline Products and Stromag.
“As a result of the strong performance and reflecting our confidence in the future, the board is recommending a final dividend of 4.0 pence per share, making a total of 6p for 2011, an increase of 20%.”
Looking forward, he said GKN expected 2012 would be another year of good progress for the group.
The year saw Birmingham-based GKN Driveline secure new and replacement business worth £500m, with strong all-wheel drive (AWD) and eDrive order books. The position was strengthened by the acquisition of German group Getrag Driveline Products. GKN said the combined business had created a leading global supplier of AWD driveline products.
In Powder Metallurgy, new and replacement business wins exceeded £100m of annualised sales. Trading margin improved to 8.5%.
The group’s Aerospace division won work worth $3.5bn. Highlights saw the first A350 XWB fixed trailing edge assemblies delivered to Airbus, while a new facility to assemble the state of the art all-composite fuselage for the HondaJet opened in South Carolina.
GKN Land Systems benefited from the acquisition of Stromag Holding, a market leading engineer of industrial power management components.
The firm said that although the macroeconomic environment remained uncertain, GKN expected 2012 to be another year of good progress for the group.
In automotive, external forecasts suggested that global light vehicle production should grow 5% with increases in Asia and North America but down in Europe.
Against this background, GKN Driveline and GKN Powder Metallurgy are expected to show further improvement, although the rate of market outperformance will be lower than in 2011.
In aerospace, civil aircraft production is expected to continue to grow, as both Airbus and Boeing increase production. The group said this should more than offset the anticipated reduction in US military aircraft demand.
“Although new programmes may be subject to delays, GKN Aerospace is expected to maintain its sales growth in 2012,” it added.
