Financial highlights
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Management basis(1) |
As reported |
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| First half |
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First half |
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| 2011 |
Gallatin |
2011 |
2010 |
Change |
2011 |
2010(2) |
|---|
| £m |
£m |
£m |
£m |
£m |
£m |
£m |
|---|
| Sales |
2,988 |
- |
2,988 |
2,701 |
287 |
2,799 |
2,536 |
| Trading profit |
247 |
(23) |
224 |
202 |
45 |
198 |
179 |
| Margin |
8.3% |
(0.8) |
7.5% |
7.5% |
0.8pts |
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| Operating profit |
247 |
(23) |
224 |
202 |
45 |
210 |
204 |
| Profit before tax |
223 |
(23) |
200 |
175 |
48 |
202 |
181 |
| Earnings per share - p |
11.8 |
(0.9) |
10.9 |
9.6 |
2.2p |
10.4 |
10.1 |
| Free cash flow |
25 |
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107 |
(82) |
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| Interim dividend per share - p |
2.0 |
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1.5 |
0.5p |
2.0 |
1.5 |
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Highlights(1)
- Group results reflect the continued strong growth in Driveline, Powder Metallurgy and Land Systems and a good performance in Aerospace:
- sales up 11% (£287 million) to £2,988 million.
- trading profit of £247 million, up £45 million, before the £23 million one-off charge relating to the temporary plant closure at the Hoeganaes plant in Gallatin, US.
- Driveline sales up 12% with 7.1% trading margin, after £12 million profit impact from Japanese earthquake.
- Powder Metallurgy sales up 15%, with 9.0% trading margin.
- Aerospace underlying sales broadly flat; trading margin, however, increased from 10.9% to 11.1%.
- Land Systems sales up 24% with 8.8% trading margin.
- New business:
- around $2.8 billion of contract extensions, new programme wins and work scope expansions in Aerospace.
- 74% win rate on driveshafts and important wins in all-wheel-drive (AWD), transaxle and eDrive products.
- investment in EVO and set up joint venture to manufacture axial flux electric motors and drive systems for hybrid and all-electric vehicles.
- JV with COMAC to manufacture exclusively the horizontal tailplane for C919 aircraft.
- Positive free cash flow of £25 million (2010: £107 million), reflecting investment to support growth.
- Net debt of £174 million (31 December 2010: £151 million).
- Interim dividend of 2.0 pence per share (2010: 1.5 pence).
- Earnings per share up 23% to 11.8 pence per share (2010: 9.6 pence per share).
- Acquisitions since 30 June 2011:
- agreement to acquire Stromag - market leading engineer of industrial power management components.
- agreement to acquire Getrag’s Driveline Products Business, to create the leading global supplier of AWD driveline products.
Notes
Financial information set out in this announcement, unless otherwise stated, is presented on a management basis which aggregates the sales and trading profit of subsidiaries (excluding subsidiary businesses sold and closed) with the Group’s share of the sales and trading profit of joint ventures. References to trading margins are to trading profit expressed as a percentage of sales. Management profit or loss before tax is management trading profit less net subsidiary interest payable and receivable and the Group’s share of net interest payable and receivable and taxation of joint ventures. These figures better reflect performance of continuing businesses. Where appropriate, reference is made to underlying results which exclude the impact of acquisitions/divestments as well as currency translation on the results of overseas operations. Operating cash flow is cash generated from operations adjusted for capital expenditure, government capital grants, proceeds from disposal of fixed assets and government refundable advances. Free cash flow is operating cash flow including interest, tax, joint venture dividends, own shares purchased and dividends paid to non-controlling interests, but excluding dividends paid to GKN shareholders. Return on average invested capital is management trading profit as a percentage of average total net assets of continuing subsidiaries and joint ventures deducting current and deferred tax, net debt, post-employment obligations and derivative financial instruments. Restatement of comparative data. Following the Group’s assumption of control over GKN Aerospace Services Structures Corp. (“GASS”) on 1 April 2010 the fair value exercise was not finalised until 31 December 2010. In accordance with IFRS 3 Business Combinations the 30 June 2010 comparatives included in this release have been restated to reflect the fair value changes. Note 2 to the financial statements has more details.
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