Shares at car components giant GKN took a hit yesterday after its underwhelming results were blamed on a strong pound.
Revenues at the company last year fell two per cent to almost £7.5bn as sterling took its toll through the company’s high exposure to foreign markets and cutbacks in military budgets.
One area to show promise was the company’s driveline division.
The company successfully launched its first complete integrated all-wheel drive system with Fiat-Chrysler last year, helping to ensure growth in its auto-related division outstripped that of the market as a whole, despite political uncertainty in Russia.
Nigel Stein, the chief executive, said: “The popularity of all-wheel drive vehicles has been the kicker behind the outperformance of Driveline. In an all-wheel drive vehicle… there is eight of nine times the potential for us because of the extra parts they need compared with a two-wheel drive car.”
The overall decline in revenue was compounded by a 54 per cent drop in pre-tax profits to £221m, down from £484m the previous year, which the company said was the result of a £232m movement on the mark to market valuation of forward foreign exchange contracts.
The company said it expected to deliver growth in the coming year despite ongoing challenges in several of its key markets, with aerospace expected to remain flat and softer conditions in agricultural markets.
Despite a commitment to increase the dividend by six per cent to 8.4p in the share, shares closed down 3.21 per cent at 373.60p.