SALES at Redditch-based technology and engineering firm GKN are up 25% year-on-year in the first six months of 2010, the company announced today.
The firm said that sales climbed from £536m to £2.701bn while trading profit was up £177m to £202m at a margin of 7.5%.
In particular, there had been a strong recovery in automotive components division Driveline, metal forging division Powder Metallurgy and manufacturing division Land Systems, compared with a relatively weak first half of 2009, it said in its half-yearly results.
Driveline sales are up 47% and Powder Metallurgy sales are up 65% – both on a 6.9% trading margin – while sales at aviation supplier Aerospace were down 5% but trading margin increased from 10.3% to 10.9%.
Land Systems sales rose by 9% on a 5.3% trading margin.
GKN has secured more than $1bn of long-term contracts for aero engine products and has a positive free cash flow of £107m compared with £23m in 2009.
Net debt was down £98m to £202m from £300m at the end of 2009.
Dividend payments were restored with an interim of 1.5p per share while in 2009 there was no interim dividend.
GKN’s chief executive Sir Kevin Smith said: “GKN’s recovery has moved into another gear and we are continuing to build on our global market-leading businesses.
“The first half trading environment has seen an improving trend for GKN’s Driveline, Powder Metallurgy and Land Systems businesses whilst the Aerospace market has continued to hold up well.
“The benefits of our restructuring actions have enabled us to improve our margins and the continued focus on cash generation has resulted in a significant improvement in the net debt position.
“As a result, and with a more positive outlook, we are pleased to be able to recommence payment of a dividend at this half year stage.
“Although macro-economic uncertainties continue, we remain confident that our strong market positions and sector leading technologies will enable us to take full advantage of growth opportunities as markets continue to recover.”
