Automotive and aerospace boost full year for GKN

A STRONG performance from its Driveline division, together with the strategic acquisition of Dutch aerospace group Fokker Technologies have helped to boost West Midlands engineering powerhouse, GKN.

The Redditch company reported full year sales up 4% at £7,231m (2014: £6,982m) and pre-tax up 11% to £245m (2014: £221m).

Commenting on the results, Nigel Stein, chief executive of GKN said: “GKN continued to make progress in 2015 and delivered on our expectations.

“We performed well against our key markets, overcoming some demand weakness and demonstrating once again the strength of our businesses, strong market positions and leading technology.

“Highlights of the year were GKN Aerospace’s acquisition of Fokker Technologies, strong market-beating growth by GKN Driveline and good margin advances by GKN Powder Metallurgy. Looking forward, we expect 2016 to be a year of good growth, helped by the contribution from Fokker.”

Birmingham-based GKN Driveline saw organic sales grow 5% over the year, significantly ahead of global auto production and a performance helped by the operation’s broad geographic footprint and increased content per vehicle.

Trading margin improved to 8.2% (2014: 8.1%) and around £880m of annualised new and replacement business was won.
 
For GKN Aerospace, the acquisition of Fokker for £480m was the stand-out achievement of the year.

The division saw organic sales growth in commercial aerospace grow 6%, although this was partly offset by a 9% decline in military spend.

A margin of 12.2% (2014: 12.4%), before Fokker’s acquisition was impacted by mature programmes declining, although this was partly offset by progress on an onerous contract.

In total, new work packages won exceeded $3.5bn.
 
For GKN Powder Metallurgy, organic sales growth was ahead of market, before the pass-through of lower raw material surcharges.

Trading margin increased to 12.0% (2014: 11.0%), benefiting partly from the lower surcharges and £185m of annualised new and replacement business was won.

The division was helped by joint venture approval of its Chinese powder production venture. There was also expansion of its Chinese sintered parts production facilities and the upgrade of North American capacity remains in progress.
 
In GKN Land Systems, organic sales were down 6% due to challenging agricultural and construction equipment markets.
 
The group said that in outlook, aerospace markets remained in  transition as some aircraft programmes were run down and others were ramped up.

“The overall market will be slightly down, according to external forecasts. Against that backdrop, GKN Aerospace’s 2016 organic sales are expected to be broadly flat, although the results will benefit from the contribution of Fokker. In the medium term, our strong commercial order book supports continuing growth for GKN Aerospace,” it added.