GKN posts record annual profits

Engineering company GKN reported record annual profits Tuesday as sales grew across all four of its divisions.

Engineering company GKN reported record annual profits Tuesday as sales grew across all four of its divisions.

Revenues climbed 13% to £6.9bn for 2012, up from £6.1bn the previous year, beating market expectations.

The company posted a 19% year-on-year increase in profit before tax of £497m following strong performance from operations including automotive and aerospace.

All four divisions - Driveline, Power Metallurgy, Aerospace and Land Systems -achieved higher sales during the period.

Aerospace, in particular, drove results as the group benefited from the acquisition of Volvo Aero and won new packages worth circa $1.4bn on a number of commercial programmes. The acquisition of Volvo Aero saw net debt increase to £871m from £538m in 2011.

Free cash flow, excluding Volvo Aero, was up from £147m to £213m.

"[Last year] was another strong year for GKN with record profits in all four divisions," Chief Executive Nigel Stein said.

"The group has continued to make good progress financially and in implementing our strategy to build a market leading global business, with excellent technology, a focus on operational excellence and above market growth."

GKN raised its dividend to 4.8p per share, taking the total for 2012 to 7.2p, a 20% jump.

Looking ahead, the company expects progress across the business, especially in aerospace as Airbus and Boeing increase production.

However, GKN anticipates a slump in European demand of light vehicle production will have an impact on results during the first half of the year.

Restructuring charges, mostly in the first quarter, are forecast to reach £16m in the Driveline unit and £5.0m in Power Metallurgy.

"GKN operates in global markets and has the capabilities needed to take advantage of the growth opportunities that those markets bring," Stein said.

"With the benefit of a full year contribution from Volvo Aero, we expect 2013 to be a year of good progress for the group."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

How the stamp duty holiday is pushing up house prices
Stamp duty

How the stamp duty holiday is pushing up house prices

Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb…
25 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020