Sales improve for GKN group

The Redditch-headquartered group, which has part of its Land Systems division in Telford, said its principal markets performed in line with the expectations.

The 21 per cent increase included £151 million organic growth, acquisitions of £587m and beneficial currency translation of £474m.

• MORE: Jobs to go at Telford's GKN as firm loses contracts

It said sales in the automotive businesses continue to perform well against the market and the aerospace division grew in line with expectations, but markets for Land Systems remain tough.

Yesterday it announced that 10 staff were to be made redundant at the Hadley Park site, where it makes chassis, gearboxes and drive shafts, as the firm suffers from the loss of further contracts.

GKN in Telford has already made more than 200 people redundant at the Hadley Park site this year because of the loss of the contract to build chassis for the Land Rover T5 at the end of August.

That was followed by another 21 jobs disappearing from Telford because its hybrid power operation was being transferred to another company site in Birmingham.

The latest redundancies leave about 340 people left employed at the Hadley site.

In today's trading statement the group said its trading margin was lower than the equivalent period last year. This was due to the commencement of the Group-wide £35 million restructuring programme, launch related costs in GKN Driveline, the absence of last year's one-off benefits in GKN Aerospace and the inclusion of Fokker Technologies.

GKN Aerospace sales in the nine months were £2.49bn, for GKN Driveline it was £3.07bn and for GKN Powder Metallurgy £762m.

GKN Land Systems sales were down from £535m to £534 million due to demand weakness for agricultural equipment and the ending of two chassis contracts, offset by a £44 million benefit from currency translation.

GKN chief executive Nigel Stein said: "GKN has continued to make progress. Organic growth was 2 per cent, whilst we also benefitted significantly from the successful acquisition and integration of GKN Aerospace Fokker as well as from favourable currency translation due to the weakness of sterling. As expected, our organic profit performance was down primarily due to one-off items, including the costs of the restructuring, which will position us better for the years ahead.

"In line with the global economic outlook, we see growth rates easing in our major markets. The automotive market is now forecast to see a one per cent increase in light vehicle production in the final quarter. New commercial aerospace programmes continue to ramp-up, although at a slower rate than expected. Our military aerospace programmes and agricultural equipment markets look set to continue their decline. Despite the slightly tougher macro-economic environment, the group continues to expect 2016 to be another year of growth."