GKN profits soar by 125pc

GKN, which is facing a hostile takeover bid from US group Melrose, also saw sales rise by 10 per cent to £9.67 billion.

Its UK defined benefit scheme was closed to future accrual during the year and a £250 million lump sum was paid to reduce the deficit and the level of future deficit recovery payments.

GKN, which has a site at Hadley, Telford, saw its order book on electrified drivelines reach more than £2bn.

It aims to formally separate GKN Aerospace and GKN Driveline into two listed companies via a demerger in the middle of 2019.

GKN chief executive Anne Stevens said: "GKN has fantastic businesses which have grown organically above our key markets, demonstrating once again our strong positions and leading technology. However as I set out two weeks ago, we now need to change our emphasis and ensure that those orders deliver world class financial performance with a renewed focus on strong margins and cash generation.

"With Project Boost, I have laid out how we plan to achieve this, through detailed product segment strategies and an emphasis on manufacturing and functional excellence. We are excited about delivering these plans."

GKN announced details of its new strategy and transformation plan along with its cash improvement initiative – Project Boost – and financial performance targets to the end of 2020 on February 14.

The GKN Aerospace team is today presenting further details on the scale of the upside opportunity for GKN Aerospace, including its ability to deliver higher margins and cash flows through Project Boost.

Boost for Aerospace is expected to deliver £160m of recurring annual cash benefit from the end of 2020 by focusing on manufacturing excellence, functional excellence, direct procurement cost savings and indirect procurement cost savings.