GKN plc has issued its Interim Management Statement covering the period 1 July to 30 September 2014, with sales for the three months reported as reaching £1,789 million. This, the company states, represented a 3% organic increase which was offset by £119 million (6%) adverse currency translation, due to sterling’s strength against most major currencies.
The company reported that third quarter trading profit increased to £160 million, with organic trading profit increasing by £20 million (14%) while the adverse currency translation impact was £11 million and the reduction due to acquisitions/divestments was £1 million. Trading margin increased to 8.9% and group profit before taxation increased 6% to £139 million.
“We have delivered a good performance in the third quarter despite adverse currency translation continuing to impact reported sterling results. Looking forward to the rest of the year, tougher prior year comparators mean that organic growth is likely to be more modest but we expect our market leading positions, advanced technology and extensive global footprint to make 2014 another year of progress,” stated Nigel Stein, Chief Executive, GKN plc.
GKN Powder Metallurgy
GKN Powder Metallurgy reported sales of £225 million in Q3 2014, compared with £234 million in Q3 2013. Trading profit was £21 million, compared with £23 million in the same period of 2013. Year-to-date sales amounted to £696 million, with trading profit of £74 million. The company stated that GKN Powder Metallurgy’s organic sales increased 3% but adverse currency translation reduced sales by 7% and trading profit by £2 million. GKN stated that trading margin was slightly lower due to a major equipment failure at one plant and softer sales in Brazilian industrial markets.
GKN Aerospace achieved organic sales growth of 3% driven by good commercial demand, military remaining flat, and offset by adverse currency translation of 5%. Trading profit increased 18% to £72 million, benefitting from a £14 million organic increase, including income of £4 million for a further milestone achieved in relation to Composite Technology and Applications Limited, the joint venture that was disposed of in December 2013. There was a positive benefit from disposals of £1 million while adverse currency translation was £4 million (7%). The trading margin improved to 13.3%.
GKN Driveline delivered a good third quarter result with organic sales increasing 7%, ahead of global automotive production, offset by 8% adverse currency translation impact. Trading profit was £62 million with the organic increase of £9 million being partly offset by £5 million adverse currency translation. Trading margin was 7.5% (2013: 6.9%). The results benefited from a strong performance in China, North America and Europe although sales in Japan and Brazil were down in line with the market.
GKN Land Systems
GKN Land Systems markets fell sharply, particularly for Agricultural equipment demand where the outlook progressively worsened during the period. Demand remained broadly flat for construction and industrial equipment. Sales were down 15%, representing a 10% organic decline and 5% adverse currency translation. Trading profit and margin were lower due to the rapid decline in sales.
During the period it was announced that Marcus Bryson, CBE, Chief Executive Aerospace and Land Systems is retiring from the Group and, with effect from 31 December 2014, will step down from the Board. From that date, Kevin Cummings, CEO GKN Aerospace and Phil Swash, CEO GKN Land Systems will report directly to Nigel Stein, Chief Executive.
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