22nd Oct 2013 14:01
LONDON (Alliance News) - GKN PLC, the maker of aircraft and automotive parts, Tuesday reported a jump in profits and sales for the third quarter, buoyed by the inclusion of its recently acquired aircraft engines business and as higher sales of commercial aircraft and automotive components offset weak sales for military aircraft and industrial products.
In an interim management statement, the maker of wings for Airbus aircraft among many other products said pretax profit jumped to GBP131 million in the three months to end-September, from GBP98 million a year earlier as sales rose to GBP1.87 billion from GBP1.60 billion and its trading margin increased to 8.2% from 7%.
Part of the margin increase was down to the inclusion of its GKN Aerospace Engine Systems business, which it bought from Sweden's Volvo AB in October last year, but it said it has also improved profitability in the rest of the business.
The aerospace division saw sales grow to GBP555 million, from GBP392 million in the third quarter 2012, as sales of components and servicing for commercial aircraft offset weaker demand for military aircraft products. Its automotive component manufacturing division, Driveline, recorded a 9% increase in sales to GBP842 million, from GBP773 million.
The company is being buoyed by continued strong global demand for commercial aircraft, while its military operations are being hit by contracting defence budgets in many Western economies. The automotive unit is being helped by resurgent demand for cars in the US.
The Land Systems division, however, saw sales dip 4% to GBP208 million, from GBP216 million as its markets remained "weak," particularity for construction and industrial equipment. The unit makes driveline components, wheels and chassis for construction and agricultural machinery, among other things.
It said the situation in its markets is set to continue. "Automotive and commercial aerospace markets are expected to remain robust with industrial and military aerospace markets soft," it said in a statement. "As previously stated, the group expects 2013 overall to show another year of good progress helped by the contribution of GKN Aerospace Engine Systems."
Net debt at the end of September stood at GBP973 million, up from GBP928 million in June, following the payment of the interim dividend and the final payment for GKN Aerospace Engine Systems.
The group intends to issue its 2013 full year results announcement on February 25 2014.
GKN shares were trading at 371.60 pence Tuesday morning, up 2.5%, making it the third-biggest gainer on the FTSE100.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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