GKN expects further growth in 2015
October 28, 2015
GKN plc has issued a trading update for the first nine months ended September 30, 2015, showing management sales for the period were £5,683 million (2014: £5,617 million), representing a 2% organic increase and in line with expectations. Beneficial currency translation of £29 million was more than offset by the net negative impact of disposals/acquisitions of £54 million, the company stated.
“We have maintained our progress reporting 2% organic growth, in spite of the tougher economic environment. We continue to expect 2015 to be a year of further growth,” stated Nigel Stein, Chief Executive, GKN plc.
GKN Powder Metallurgy reported sales in the nine months of £694 million, just slightly lower than the same period in the previous year (2014: £696 million). GKN added that organic sales reflected the negative impact on powder sales of a direct pass through of lower raw material prices and a slowing in European sales that are exported to China. GKN Powder Metallurgy margins were slightly higher than those achieved over the comparable period last year.
In other divisions GKN Aerospace reported sales in the nine months were £1,756 million (2014: £1,642 million), slightly up on an organic basis. GKN Driveline delivered a good result with sales in the nine months of £2,665 million (2014: £2,594 million). GKN Land Systems sales in the period declined to £535 million (2014: £602 million), including a 7% organic decline principally due to demand weakness for agricultural equipment.
Sales for GKN’s other businesses fell to £33 million (2014: £83 million) reflecting the disposal in 2014 of the Group’s share of the Emitec joint venture. Overall, these businesses reported a small loss reflecting the investment in GKN Hybrid Power.
GKN stated that in line with the global economic outlook it sees a slight softening to the rate of growth in its major markets in the fourth quarter. The automotive market is forecast to see a 1% decline in the final quarter and military aerospace and agricultural equipment markets look set to continue their declines, whereas commercial aerospace markets remain robust. Notwithstanding the backdrop of the tougher economic environment, before any impact from the Fokker acquisition, the Group continues to expect 2015 overall to be a year of further growth.