Cars Drive GKN Profits Up 33%

LONDON -- This morning, GKN (LSE: GKN.L  ) reported pre-tax profit up 43% to 289 million pounds, driven significantly by a 29% headline rise in trading profit at its world-leading driveline division. Strong gains were also posted by its land systems division, where headline profit was up 33% to 52 million pounds, and its powder metallurgy operation, which saw profit up 21% to 47 million pounds.

Group sales were up 16%, with a positive free cash flow of 28 million pounds (up 12% on 2011), and earnings per share rose 22% to 14.4 pence per share.

The better-than-expected results allowed chief executive Nigel Stein to confirm an anticipated 20% hike in its interim dividend:

GKN has continued to make good progress both in terms of financial performance and implementing our strategy to build a global market-leading business. First half trading has seen sales increases and margin progression for each of our four Divisions and our new acquisitions, Stromag and Getrag Driveline Products, are performing well.

As a result of the strong performance and confidence in the future, the Board has decided to increase the interim dividend by 20% to 2.4 pence per share.

The macroeconomic environment continues to be uncertain, with increasing headwinds in European auto markets. However, with the benefit of a good first half and the Group's broad exposure to global markets, our expectations for 2012 remain unchanged. We expect 2012 to be another good year of progress for GKN and, in addition, we look forward to welcoming our new acquisition, Volvo Aero, into GKN when the transaction completes in the next few months.

With full-year forecasts expected to be met and a rising dividend, GKN may now prove an attractive proposition to Foolish investors.

But if you're keen to earn even greater returns, this free Motley Fool report -- "10 Steps To Making A Million In The Market" -- could help you on your way. The report highlights how choppy markets can still provide the big winners to take you to that magic million. You can download this free report right now, but hurry -- the report is available for a limited time only.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors for 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

Jon Wallis doesn't own shares in GKN. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1965058, ~/Articles/ArticleHandler.aspx, 11/26/2014 8:59:16 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement