GKN Powder Metallurgy sales dip due to General Motors strike
November 27, 2019
Melrose Industries PLC, UK, has published a trading update for its third quarter, July 1 to October 31, 2019, in which it states that its GKN Powder Metallurgy division was impacted by the temporary effects of the General Motors strike, leading to a sales decline of 13% when compared to the same period last year. However, the company stated that without the strike, revenue would have been in line with the Board of Director’s expectations.
Melrose confirmed that during the trading period, contracts were exchanged to acquire Forecast 3D, an Additive Manufacturing company which had sales of $19 million in 2018. The acquisition is expected to complete by the year end and will reportedly further expand GKN Powder Metallurgy’s capabilities in this growing market.
The GKN Aerospace division was reported to have achieved sales growth of over 5% in the quarter, compared to the same period last year, outperforming the board’s expected longer term average growth rate. In addition, good margin improvement has been delivered compared to the same period last year. GKN Automotive also delivered a higher profit and margin in the period compared to the same period last year. Sales were down 5% year-on-year, which included the temporary effect of the General Motors strike in the USA.
Melrose stated that group net debt was in line with the board’s expectations, with significant investment and restructuring actions being funded to further improve performance and initial steps to reduce working capital in GKN being implemented as planned.
Justin Dowley, Chairman of Melrose stated, “Melrose continues to do what it has always done well: improve businesses. Some macro conditions could be more helpful, but this has not stopped us continuing to transform the GKN businesses, delivering another trading period in line with expectations, and achieving better trends than seen in the first half of the year. We are excited about what is possible and confident in our ability to unlock significant further shareholder value.”