GKN plc 2006 Interim Results Announcement
LONDON, August 3 -- As reported Business performance
under IFRS excluding
items in note (1) below
First First First First
Half Half Half Half
2006 2005 Change 2006 2005 Change
GBPm GBPm GBPm GBPm GBPm
Sales - including 2,001 1,940 3%
share of
joint ventures
Less share of joint (105) (81) 30%
ventures
Sales - subsidiaries 1,896 1,859 37 1,896 1,859 2%
Trading profit - 119 115 4 119 115 3%
subsidiaries(1)
Operating profit 129 72 57 119 115 3%
Share of joint ventures 8 5 3 8 5 60%
(post-tax)
Net financing costs (15) (17) 2 (15) (17) 12%
Profit before tax 122 60 62 112 103 9%
Profit after tax 104 42 62 92 78 18%
Earnings per share - p 14.6 5.6 9.0 12.9 10.5 23%
First First
Half Half
2006 2005 Change
p p %
Dividend
Proposed interim dividend per 4.1 4.0 2.5
share
Note
(1) Figures exclude the impact of restructuring and impairment charges, profits on the sale of businesses and changes in the fair value of derivative financial instruments and represent underlying business performance.
Business highlights
- Growth of 9% in underlying profit before tax and 23% increase in underlying earnings per share Increase of 37% in Aerospace trading profit on sales up 12% Record levels of new orders in Sinter Metals - US operations return to profitability Driveshafts secure 75% of all available new business New leadership positions for Aerospace and OffHighway after US acquisitions Strong order books across Group provide solid platform for growth
Kevin Smith, Chief Executive of GKN plc, commented:
"GKN is making encouraging progress in 2006.
The benefits of two years of hard work to restructure the business and improve competitiveness are now clearly showing through in results. Profits are up nicely in line with expectations and our favourable taxation position has given a strong boost to earnings.
Our major automotive businesses have delivered exceptional levels of new business wins and Aerospace has produced another year of strong growth in sales and profits.
The two US acquisitions we have announced will help create new leadership positions for Aerospace and OffHighway and will make a good contribution to revenues and profits in 2007.
GKN's market leadership positions, increased exposure to high growth markets and significantly strengthened order books provide a sound basis for accelerated growth."
2006 Outlook
Markets for all our businesses continue to run in line with our earlier expectations.
For the remainder of 2006, car and light vehicle production levels in North America and Western Europe are forecast to be very similar to the same period of 2005. Production in the emerging markets of Asia and South America is forecast to continue to show growth.
In OffHighway, after a weaker first half, demand for agricultural equipment looks to have stabilised at levels slightly above those experienced in the second half of last year while the construction equipment market remains strong.
In Aerospace, demand in the second half is expected to be similar to the first, with both military and civil markets remaining strong.
Against this background, the Group expects to continue to make good progress, notwithstanding higher raw material and energy costs which are currently running above the levels we had anticipated at the time of our February outlook statement.
The acquisitions announced today are expected to provide a modest net benefit to 2006, and should make a good contribution to 2007 performance.
Looking ahead, we remain confident that with our major strategic restructuring largely completed by the end of the year, strong programme wins under-pinning organic sales growth and further focused acquisitions, the Group is now well positioned to accelerate growth.
The full text of this press release together with the attached financial statements and notes thereto may be downloaded from www.gkn.com.
Further Enquiries GKN Corporate Communications Tel:+44(0)20-7463-2354