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Trading statements

GKN progresses

25 October 2016 07:19

GKN says trading in the nine months to the end of September was in line with forecasts with management sales up 21%, including organic sales growth of 2%.

GKN, the global engineering business that serves the aerospace and automotive markets, says its principal markets performed in line with the expectations set out in its July results announcement.

Management sales for the nine months ended 30 September 2016 were £6,895 million (2015: £5,683 million). This 21% increase comprised £151 million (2%) organic growth, acquisitions of £587 million and beneficial currency translation of £474 million.

Sales in the Automotive businesses continue to perform well against the market and the Aerospace division grew in line with expectations. Land Systems' markets remain tough.

As expected, the Group trading margin was lower than the equivalent period last year. This was due to the commencement of the Group-wide £35 million restructuring programme, launch related costs in GKN Driveline, the absence of last year’s one-off benefits in GKN Aerospace and the inclusion of Fokker Technologies.

Operating cash flow was similar to the equivalent period last year. Chief executive Nigel Stein said: "GKN has continued to make progress. Organic growth was 2%, whilst we also benefited significantly from the successful acquisition and integration of GKN Aerospace Fokker as well as from favourable currency translation due to the weakness of sterling. As expected, our organic profit performance was down primarily due to one-off items, including the costs of the restructuring, which will position us better for the years ahead.

"In line with the global economic outlook, we see growth rates easing in our major markets. The automotive market is now forecast to see a 1% increase in light vehicle production in the final quarter. New commercial aerospace programmes continue to ramp-up, although at a slower rate than expected. Our military aerospace programmes and agricultural equipment markets look set to continue their decline. Despite the slightly tougher macro-economic environment, the Group continues to expect 2016 to be another year of growth."

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