Business highlights
- Solid results despite challenging automotive markets
- Resilient Driveline performance - headline sales up 6%
- Powder Metallurgy moves back into profitability
- Excellent contribution from OffHighway Systems - sales increase 12%
- 10% increase in Aerospace sales - profits double
- CVJ manufacturing strategy now widely deployed
- Significant product and programme wins across Automotive and Aerospace
Kevin Smith, Chief Executive of GKN plc, commented:
"GKN has produced a solid set of first half results in turbulent automotive markets. Sales of continuing operations were 5% higher and subsidiaries' trading profit in the period reduced only slightly, by £2 million to £115 million, despite significant increases in raw material costs.
"All of our major businesses made progress with particularly encouraging results in Driveline and Aerospace.
"The restructuring programme in Driveline and other parts of the Group which was announced in March 2004 is well underway and on track to deliver the benefits originally anticipated.
"Significant product and programme wins across Automotive and Aerospace provide a firm foundation for future growth."
Outlook
Overall, the outlook for the remainder of the year in our major markets remains unchanged from the February and May statements.
Automotive production forecasts for North America and Western Europe have softened slightly but demand in emerging markets remains robust with China expected to return to growth.
Aerospace markets continue to be strong and the OffHighway sector also looks steady.
Global raw material prices will continue to be a major influence on the performance of the Group's Automotive businesses. Recent decreases in steel surcharges have been encouraging although the cost of other raw materials and energy continues to be high.
For Automotive we expect an improving level of performance allowing for the inherent seasonality in automotive production between the first and second halves of the year. The strategic restructuring programme will continue as planned.
Aerospace and OffHighway are expected to continue to show good levels of performance.
Based on the Group's first half result and in light of the factors above, we see no reason at this stage for changing our expectations for the Group's trading performance for the year.
Further enquiries
GKN Corporate Communications
Tel: 020 7463 2354
The full text of the Chairman and Chief Executive's Statement which will appear in the Interim Report together with Financial Statements are attached to this news story.
Download Chairman & Chief Executive's Statement
Download Financial Statements
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