GKN powers on in first half

published 31 July 2012

UK engineering giant GKN saw profits jump in the first half as it benefitted from a broad exposure to global markets.

Pre-tax profits were up 33% to £266m at the FTSE 100 firm as sales rose 16% to £3.46bn.

This allowed the company to push up the interim dividend 20% on the year before, to 2.4p.

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However, the results were flattered by the impact of the 2011 fire at the Gallatin metal plant in Tennessee, where five people were killed.

Excluding the impact that had on the 2011 results, pre-tax profits were up 19%.

First half trading saw sales rise and margins improve in each of the company's four divisions.

The firm said recent acquisitions Stromag and Getrag Driveline Products were performing well, with the latter performing ahead of expectations.

"The macroeconomic environment continues to be uncertain, with increasing headwinds in European auto markets," said Chief Executive Nigel Stein.

"However, with the benefit of a good first half and the group's broad exposure to global markets, our expectations for 2012 remain unchanged."

The company said that its takeover of Volvo Aero was expected to complete around the end of the third quarter.

GKN is paying AB Volvo around £633m for Volvo Aero, which designs, engineers and manufactures components for aircraft engine turbines.